barratt dream start - new build

geoffky

run away as fast as you can....

geoffky

apattie wrote: »

Hi Nick,

We are in the process of completing out dream start purchase. We tried from all angles but they would not budge on the price through a dream start package.

However, that did not stop us from going ahead with it. Yes, there are a few cons but we have come away with a lovely home that we would not be able to afford now and as we want to stay for 5 to 10 years it has been a really good deal for us. Just some points that may clear up other comments on this thread.

The 25% you will owe Barratts does not include any improvements you make to the house. So when you value the house at the time you want to pay Barratts back they will only take 25% of the market value of the original build. Note they take the average between their independant evaluation and yours.

Yes, if the house price goes up you owe them more but if there is a dip or crash in the market and the value goes down you still pay them the 25% of the market value when valued at that time. So you could end up paying them less than you originally owed if your lucky. I double checked this and it does say it in their documentation and brochure.

There are many pros and cons but in OUR situation we think we have made the best decision for us and our new family.

We now have a brand spanking new 3 bedroom home instead of a 2 bed that we would only have for 2 years before we would have to move.

Good luck to you

Andrew

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
what is a dream purchase?..please tell me did you dream about a house?......your a daydreaming fool.....how can you make improvements to shoe boxes apart from a conservatory that cost a fortune to heat and no one uses once the novelty factor has gone....IQ tests for buyers now that would be market changing..

special_k83

PasturesNew wrote: »

Builders used this in the last housing crash (88-96) and it was a nightmare for those that bought them. Quite often, when they came to buy the 2nd half they couldn't afford it; couldn't raise a mortgage for it.

(using current day figures) ... in a lot of instances, say, property cost £100,000. Buy £75,000 now and buy £25,000 in the future. Then the house value dropped to £70,000 and they couldn't raise another mortgage which would take them further into negative equity.

Don't do it.

This is NOT shared ownership, you own 100% of the property at completion

sidge66

I've looked into a simular scheme through Crest Nicholson at a developement site in West Sussex. In fact I went about trying to gather information the same way as you have Nick, by starting a thread on here. Seems alot more people have heard of your scheme because although I was getting feedback its was mainly negative, as alot seems to be on here. I know people will say if you didn't want to hear it then why pose the question in the first place but still felt people were knocking something they didn't fully understand.
I know advice like save your money for a deposit, rent somewhere to get a feel for it and don't by in this climate can be useful but if this option is the only one open to you then I'd go ahead and give it a go.

The property we are looking at is a two bed flat priced up at £169,950, same perks as you describe- 75% with 25% loan from builder, fee's paid, carpets and fitted kitchen etc. So far we've been rejected with offers of £155,00 and £158,000, we are currently decided whether to up the offer once more. I know an ea who has been dealing with this site and they said despite the falling market the properties on this plot are selling well.
I know it varies depending on where you live but even if house prices go down they will increase in the future, it just depends on how long you can commit to living in the new build, ie enough time for the prices to have increased on what you payed, meaning you won't have negative equity when you sell up despite giving the builder their 25% back.

guppy

special_k83 wrote: »

This is NOT shared ownership, you own 100% of the property at completion

The property isn't even worth 100% of the price you pay at completion...or Barratt wouldn't be offering this scheme. Purchasers are effectively buying in to negative equity from the start.

"Owning" 100% of a liability is nothing to get excited about

neverdespairgirl

sidge66 wrote: »

. I know an ea who has been dealing with this site and they said despite the falling market the properties on this plot are selling well.

Further breaking news - Turkey votes against Christmas.........

GDB2222

Just one serious point for the OP. There have been problems for people buying new-builds off-plan, the problem being that they have in some cases waited a year for the build to occur. Some are still waiting.

BlueIsTheColour

I purchased an apartment on this scheme in 2005, and dont have access to my paperwork at the minute, can anyone tell me if the 25% element is secured as a 2nd charge or not? Or is it a loan agreement?

I am contemplating BR but not sure where I stand with this.....

Thanks in advance for any help

Squish_21

Personally I'd avoid this kind of scheme completley. Considered it as an option when I was a FTB a couple years back SO SO glad I bought on the open market in the end.

If there is any way in which you are able to buy £100% of a normal house without the 25% left hanging around your neck for the whole time you live there then i'd hands down go for that option.

milliemonster

I think these schemes look attractive but what you fail to realise is 10 years is a long time to get used to having a nice smallish mortgage to pay, then bang all of a sudden you have to remortgage for another third, GREAT! ok your wages may have increased but so will your lifestyle to accommodate no doubt and unless you can be extremely strict with yourself, you are going to find yourselves in the position of your mortgage repayments drastically increasing by a third, so on a £125k house your initial 75% is £90k, lets assume you took on a mortgage of £80k, repayments on that would be around £500 a month? lovely, I'll have some of that thank you very much, now humour me here, lets say you go merry along paying your £500 a month for the next 10 years, wages increase with RPI (if you are lucky) get a nice new car, holidays etc, and look, house prices are shooting up again, fab! all this equity we are gaining, great!, house is revalued in yr 10, its now worth £250k (I did say humour me!), what's 25% of that then? £50k, so you now have to add another £50k to your mortgage and see nothing in return for that except a rise in your repayments to almost £1000 a month depending on interest rates, you still think this is a good idea?

Or worse, house prices fall, this 2 bed apartment is a bit small now you are wanting or have started a family, in year 6 you want to move up, get the house valued, it's only worth £90k, Barratt want 25% of that thank you very much (or god forbid £35k which was the 25% from when you bought it), which is around £22k, you won't have paid off much equity during this time so you will need to sell at £100k to settle both mortgages, meaning a negative equity of £10k, bang you can't move and are trapped in this hovel