New build H2B vs traditional purchase

Locornwall

Does anyone have any thoughts on the merits of a new build using H2B vs an older home with a standard mortgage? I understand this is a general question.

grumiofoundation

1. Do you want a new build home?
2. If you do want a new build home do you need to use HTB? (presuming no from your Q)

Advantages of HTB loan - 20% interest free for 5 years (40% London’s)
Disadvantages - pay back 20/40% of current value, so if house value goes up have to pay back more than originally borrowed (will likely wipe out the savings from interest free)
- if don’t redeem loan only pay off interest
- cannot rent out while have loan

Personally we will not be in a position to need to use the HTB loan so won’t be considering it. Would be unlikely to look at new builds anyway because they seem to be overpriced compared to “second hand” houses.

RelievedSheff

We have recently completed on a new build without H2B.

We could have had a much bigger property on the estate if we had chosen to use H2B but decided that as there are only the two of us and the dog that the 3 bed detached was big enough for us and the smaller running bills would be more beneficial than the extra space.

You don't have to use H2B and most people that do use it don't need too.

For us having lived in a 1930's house and now a new build, the new build is far better. Better build quality, better insulation (sound and heat), better layouts more suited to modern living, etc. We would not go back to an older property now.

FTBAngst

I’ve opted not to go for help to buy. The only way I would have considered it is if there was something I could pay into with a higher interest to what I would be paying in the mortgage and still be able to save enough to pay off the HTB loan (there was not).

There are also a few people on here complaining about the help to buy ‘scam’. The risk of the value increasing beyond what i predict and save for after 5yrs is too high for me

Locornwall

I think that’s the issue. People are scared of prices going up and therefore the repayment after 5 years being considerably higher. That being said, a 20% interest free loan for 5 years is appealing. I understand there are some issues such as a higher interest rate than would be with a standard mortgage, new build service charge.

george4064

I bought my first flat in London earlier this year and was fortunate enough to be able to afford what I wanted as a traditional 'non new-build'.


Whilst not having any first hand experience, I much prefer traditional second hand homes both in terms of better quality structure (a lot of new builds are constructed very poorly) and generally I think I prefer the area around my traditional second hand flat than living in a new build 'village' somewhere.

RelievedSheff

george4064 wrote: »

I bought my first flat in London earlier this year and was fortunate enough to be able to afford what I wanted as a traditional 'non new-build'.


Whilst not having any first hand experience, I much prefer traditional second hand homes both in terms of better quality structure (a lot of new builds are constructed very poorly) and generally I think I prefer the area around my traditional second hand flat than living in a new build 'village' somewhere.

If you could see our old 1930's semi we traded in you would certainly not consider it to be better quality than our new home. It was definitely built very much on the cheap with tissue paper walls, crumbling bricks and a series of bodged upgrades throughout it's lifespan.

We part exchanged it against our new build but then it was subsequenty sold quickly in the period before we moved out by the developer. I felt very sorry for the first time buyers who bought it.

joshp1993

We're about to complete on a new build using the HTB scheme and we're more than happy with the terms and the house (it's fully built and due to complete next week). For us, we could not have afforded a house this size without HTB and it would've been costly to move again in a few years as we would've outgrown a smaller home pretty quick, then meaning we would have to pay stamp duty on the next purchase as we'd no longer get the FTB exemption.

Since we only had just over a 6% deposit we also would've had a much higher mortgage rate without the HTB loan. If you are concerned about the house price rising then just sell it in 5 years time. This will mean incurring no interest on the HTB loan and you'll benefit from 80% of the house price gain.

I'd say that for us it was more about taste - we didn't really like the look of older houses and wanted something new, certainly within our budget we couldn't have gotten a detached house in this area if it wasn't new build. I do think new builds are often looked down upon but each to their own.

younghousebuyer

we were in position of good salary but tiny deposit, so plan to overpay monthly the difference between what we are actually paying and what we would have paid on a 95% mortgage, we are hoping this will go a long way to building up enough equity to pay the laon

Hectors_House

Locornwall wrote: »

Does anyone have any thoughts on the merits of a new build using H2B vs an older home with a standard mortgage? I understand this is a general question.

Just that I think it’s disgusting youngsters are forced to buy a new build to get the government help.