barratt dream start - new build

macaque_2

nickb_2581 wrote: »

hope i can get some advice on the following situation:-

im looking at buying a 2 bed apartment new build on a barratt development reason being ive invested a large sum in a business venture recently but still want to get on the ladder. barratt offer a financial package called "dream start" whereby u only pay 75% of the asking price, the remaining 25% is payed by barratt and held for upto 10 years before it needs to be payed back. they also pay legal fees, stamp duty, kitchen appliances, carpets. theres also no deposit other than a £500 commitment fee.

ive been approved on the mortgage front provisionally so im ready to start negotiations but im not sure on wher emy angle should come from as they offer so much surely there isnt much room for manouvre in terms of price etc. has anyone got experience of this deal or negotiation in general to give me some points to hit the sales rep with??

there asking £124K for a 120yr lease hold but also wanting to charge me £67 p/month maintence fee and £18 p/month ground rent both of which id be looking to waiver.

many thanks

nick

Good luck on your purchase. Owning a home is nice but I did want to pick up on your reference to 'getting on the ladder'. I trust you are aware of what happens if the ladder is resting on soft ground. You could find yourself stuck to the ladder and up to your waist in mud.

mpsavuk

I think these offers are all smoke and mirrors. There is a big catch in there somewhere. The house builders are not daft, they see interest rates coming down, they know that's a sign that there is a recession on the way and they want to protect their part of the investment somehow.

I feel that buyers of these deals are in for a big bill and a big shock in 5-10 years time. They will really resent handing over 25% of their house value, it's going to hurt.

See you on "Watchdog"?

deedar_3

I put a reservation fee down on a property in yorkshire. All going swimmingly until the contract came through stating that the 25% was not interest and rent free after all (despite the marketing blurb which stated it was both interest and rent free), in fact it says in there that the interest rate is 4 percentum above bank of scotland interest rate.

About to tell them where to put it all! If you are going to do this I would say don't use the conveyancer they suggest (oh it will speed things up, we have a great relationship with them etc etc) and think at least twice about whether their suggested financial advisor is your best choice. Read everything that comes to you and don't trust anything said to you!

balusri

deedar wrote: »

I put a reservation fee down on a property in yorkshire. All going swimmingly until the contract came through stating that the 25% was not interest and rent free after all (despite the marketing blurb which stated it was both interest and rent free), in fact it says in there that the interest rate is 4 percentum above bank of scotland interest rate.

About to tell them where to put it all! If you are going to do this I would say don't use the conveyancer they suggest (oh it will speed things up, we have a great relationship with them etc etc) and think at least twice about whether their suggested financial advisor is your best choice. Read everything that comes to you and don't trust anything said to you!

Helloo Deedar... I am giong to book a barratt home under dreamstart scheme. is there really a interest on the remaining 25%?? How could they say it is all interest free when there is one? can you please please confirm this? it will really help us giong forward.
Thanks

Running_Horse

lynnexxxo wrote: »

I'm interested on the terms Barratt will make you will pay back the other 25% within the next 10 years?

Maybe I'm missing something but surely a mortgage over 25 years for 90K plus having to pay another 32k to barrett over 10 years is going to work out more expensive than a straight 124k mortgage.

And if your finances improve, you will be paying back extra to Barratt rather than taking equity for your next move. You could be living there for a very long time. But with a lack of alternatives, I can see why it looks tempting.

This scheme is for the benefit of Barratt, not you. Think of it this way, if everyone refused to shore up prices in this way, Barratt might have to reduce the price of flats to a more realistic level. Even with this scheme, there are hundreds of new empty unsold riverside flats round my way, where other properties still sell very quickly.

Doozergirl

deedar wrote: »

I put a reservation fee down on a property in yorkshire. All going swimmingly until the contract came through stating that the 25% was not interest and rent free after all (despite the marketing blurb which stated it was both interest and rent free), in fact it says in there that the interest rate is 4 percentum above bank of scotland interest rate.

Does it say 'contract rate' or similar next to it?

This is standard contract speak. It's regarding failure to complete, iirc. If I'm right then it has nothing to do with the remaining 25%.

I've got a contract in my hand right now for a regualr freehold property and it quite clearly says it here "4% above the base rate for the time being of HSBC Bank plc"

If they really were asking for rent or interest on that 25% then you need to get in contact with Trading Standards as they'd be all over Barratt like a rash. Barratt aren't that stupid.

mr.broderick

chelseablue wrote: »

Isn't it schemes like this that keep pushing the prices up?

Wish you'd all make your minds up i thought prices were coming down ?

Raffles99

Think carefully about how you intend to move up the ladder in the future. When you want to sell, Barratt will be taking 25% from you. This will compromise your ability to trade up.

Its worth noting that in 1991/2 some London developers resorted to 50% off, 50% in 10 years. 10 years later, some of these flats had STILL not increased enough in value for the owner to pay the extra 50% and not be in negative equity. I know of one group of residents who went to court to try to annul the scheme, since they were all being threatened with en masse respossession - not sure how the case ended up.

Think also about how you will pay the extra 25% if prices do not rise for 10 years. You buy for £100k but only pay £75k. Assume in 10 years time it is still only worth £75k. How the heck are you going to respond to Barratt's demand for the extra £25k? You won't be able to get a mortgage because you'll have no equity in your property.

One other general thought - it is highly likely that apartment builders will soon start dumping unsold apartments onto Housing Associations at big discounts. You could end up owning a flat in a building that is 50-75% social housing, and that would not be great news long term.

neverdespairgirl

RoxieW wrote: »

I had to bite my tongue from saying - so you would n't swap your crumbling 2 bed terrace that you're having to completely gut to get livable for a brand new 4 bed, 4 bath house.

I most certainly would stick to an old terrace over a brand new house any day of the week!

The flat I now live in was built in the 1920s, and is the newest building by decades I've ever lived in.

sarahdh

if barratt knocked 15-20% off the asking price in the first place, would dream start be worth doing then?