New build exchange and completion confusion!!

Sophiegass

We are looking at a new build house at a local development. There are 3 phases, the first to be completed later this year but we would like a house which is part of phase 3, due to be ready September 2020.
We were hoping to reserve it but are wondering if we reserve a house now, when does the exchange have to take place? We won’t have our full deposit ready until the end of the year and both of our salaries will have increased quite a bit in the next year and a bit. Is it possible to reserve it now, and exchange sometime next year so that it can complete in September 2020. The house is by the Ashberry Homes who are part of Bellway, and I have found on the Bellway FAQs that it says you must exchange within 28 days of reserving. However I have also seen a few other articles online that say you can’t exchange until it’s within 6 months of completion - which would make sense as most mortgages are only valid for 6 months too.
It’s really hard to find anything online, can anyone shed some light on this???

Oxid8uk

Are you sure you can reserve a plot on Phase 3 yet? You can't usually reserve a plot until they are released which for a Sept 2020 completion I doubt they will be released until the beginning of 2020. You may be able to get your name down on the waiting list for particular plots and then they contact you when they are about to release them to see if you are still interested.

middleclassbutpoor

Usually the houses will be released approx 6-9months before they are due to be fully built. You may not be able to reserve in the phase you wish and prices tend to increase with each phase (albeit this can depend on market forces).

When you reserve a new build, it typically will require you to exchange within 6 weeks.

The likelihood is that you will not be able to reserve a house for so far in advance. So you would just have to keep an eye out and in contact with the developer to understand when phases are released.

Of course a better property, or development may come up in the meantime so you are actually better holding off before committing to anything if you are not in a position to move until 2020

Sophiegass

I’ve been in contact with a sales person recently and she has said that they’re going to be released in 4 weeks time. But it seemed silly to reserve a house now and have to exchange, handing over your £20k when you can’t actually move in for another year and a half?

Sophiegass

I wouldn’t actually mind if the reservation was held off for another year or so, like you said something else might come up in the meantime that is better suited to us. I’m just worried that if we had to reserve next month to avoid missing it, we won’t be able to exchange straight away and we’ll miss out.

AnotherJoe

Sophiegass wrote: »

I wouldn’t actually mind if the reservation was held off for another year or so, like you said something else might come up in the meantime that is better suited to us. I’m just worried that if we had to reserve next month to avoid missing it, we won’t be able to exchange straight away and we’ll miss out.

Well, that's what they are banking on to make this risky move, your FOMO.

What is your backup plan, having paid overa whacking big deposit, and being legally committed with serious penalties to buy this property , if something went amiss over the next 18 months? Promotion doesn't come through,company downsizes, , mortage company won't give you the mortgage size you need?

Walk away and wait until you are less exposed.

AdrianC

How much do you actually have to hand over on reservation?
How much do you actually have to hand over on exchange?

You'll reserve the property as soon as you put a very small amount down and say "Yep, plot 17 for us, please." - but exchange will be a long way in the future. For a new-build with a long completion date, it's probably not going to be the full 10% on exchange, either.

Don't confuse the "deposit" (the amount of the price you've saved up so don't have to borrow) with the "deposit" (the security payment on exchange, normally 10% on pre-owned houses).

Charles2988

The sofa finance has not started yet because we are not in our home. Would this affect my mortgage completion and do halifax do another credit check?

Sophiegass

The reservation fee will be between £250-£1000 and the exchange is when we pay our actual 5% deposit (we’re using help to buy). I’ve seen a lot of things that say you just exchange within 4-6 weeks of reserving but I’d prefer that’s not the case.

eddddy

Sophiegass wrote: »

I’ve been in contact with a sales person recently and she has said that they’re going to be released in 4 weeks time. But it seemed silly to reserve a house now and have to exchange, handing over your £20k when you can’t actually move in for another year and a half?

Sophiegass wrote: »

The reservation fee will be between £250-£1000 and the exchange is when we pay our actual 5% deposit (we’re using help to buy). I’ve seen a lot of things that say you just exchange within 4-6 weeks of reserving but I’d prefer that’s not the case.

You would prefer not to exchange so early (for good reasons).

But I guess the developer would prefer a buyer who will exchange so early.

So essentially, I guess the developer will go with the buyer who's prepared to exchange soonest.

Wouldn't you do the same?...

• a) You are saying you might/might not exchange in 12 months time

• b) Another buyer comes along saying they are happy to exchange in 4 weeks time

Who would you choose, if you were selling?

Obviously, you can just wait 12 months, and see if the property is still available.

Sophiegass

Yeah I do see it from their point that they want to know they’ve got a customer who isn’t going to pull out in a years time and will exchange sooner rather than later. It just doesn’t make sense to me that if someone had the deposit to hand over now, why would they want to wait a year and a half for their house? We’ve looked in detail at the upcoming developments around our area and it’s unlikely we’ll find a house as good as this one and for this price, as we live on the borders of London and Kent so house prices are atrocious - I’d be worried that if we wait it will be gone.