barratt dream start - new build

RobertoMoir

nickb_2581 wrote: »

there is no interest payable on the 25% for the 10yrs. its repayable when u sell the home or within 10yrs in part or full.

if its payable when selling the house they take 25% of the property's sale price.

yes over the long term its more expensive to split the mortgage up as u say but im looking over the next 2 yrs rather than 10yrs.

Why aren't you thinking about 10 years ahead? If you're not planning to stay in this place for longer than those 2 years then I'd personally question the need to buy right now instead of waiting until you can have more of a say on the terms of the deal.

So if you buy it from them at (for example) 100k and sell it for 80k, do they just write off the loss? Or do you have to pay 25% of the sale price OR the current amount that they're "loaning" you, whichever is higher?
(of course, the houses in this kind of deal wouldn't be overpriced by about 20% to 25% in the current market climate, or anything, dear me no)

There's an old saying: If you sit down to play cards and can't work out who the sucker at the table is, then the sucker is probably you. Barretts are doing this as a way of screwing some return out of newbuild homes that nobody actually want at the moment. Sorry to be so direct about it, but it seems like you're convinced that this is some kind of great financial deal for you and I'm not sure that it is.

If you really like the place (you seem to be talking more about really wanting to be on the property ladder rather than about how the place you're thinking of buying brings tears to your eyes at the sheer joy of living there one day) and if you think the price in total is worthwhile then go for it. But don't kid yourself that you're getting some kind of special good deal out of this unless you named the buying price and their agent started crying while agreeing to it.

Personally, the idea that Barretts have to pay stamp duty on a 2 bedroom apartment tells me it's probably overpriced.

RobertoMoir

special_k83 wrote: »

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

Well yes, but as a practical matter how else other than re-mortgaging would you suggest that the majority of the people are going to repay that massive loan when it comes due?

LydiaJ

I think the people warning you not to do this from a financial angle are probably talking sense, but that's not really my area of expertise. I do have something to say about Barratts though.

I live in a Barratts house. The build quality is terrible - my son (who's 8) describes our house as "built of cardboard". It was 2 years old when I moved in 3 years ago, and since then I've had several major problems - drains not connected properly, radiators going rusty, boiler breaking down, defective front door lock etc.

I'm only a tenant, so these things are mainly a headache for the LL and LA, but it's been enough to convince me that I would never buy a Barratts property, or certainly not one built in the last 10 years.

BlueIsTheColour

Well at the time when we bought ours using this scheme for some stupid reason it seemed like a good idea, how I wish we had stayed renting our 3bed house for £435 a month.....Hindsight eh? A beautiful thing!

But if anyone does know if its a 2nd charge or how it works that would be fabulous? I cant access my paperwork until next week

Thanks everyone, have a great new year

mbga9pgf

Take some advice from the beenie. Dont buy unless you want to commit financial suicide.

Or you negotiate at least 30% off.

Either way its win win for your finances and very bad for barratts.

http://www.channel4.com/4homes/property-money/housing-market-news-views/channel-4-news-4homes-house-price-crash-by-sarah-beeny-08-12-19_p_1.html

terrierlady

its a second charge over your property plus if the property price goes down you only pay the 25% of the price two valuers come up, other charges would be to sign off 2ndcharge when that time comes and the extra interest if NOT repaid after years some are 2% above bank of england rate other developers go upto 5%. most developer's will still accept offers on this scheme , you do need to use their F.A as problem comes with new build incentives, good luck enjoy your new home, we have always helped people who do not have the funds to buy elsewhere and need help either with deposits or incentives like carpets etc.Funny enough some people do like new build and could afford to buy elsewhere takes all sorts.

geoffky

Very Near Every One Of You Thinking Of Buying These Places Will One Day Regret You Ever Entertained The Idea
..mark My Words....they Are A Shortcut To Financial Disaster Later On In Life...

needahome_2

nickb_2581 wrote: »

yes theres a huge surplus in the city center but the development im looking at seems to be holding the prices even apartments, plus its in the catchment area for a highly regarded school and area.

dont see how that would affects flats, sorry appartments. How many families with teenage kids would like to live in a 2 bed flat, with it shared kitchen,living & dining room ? just goto a good school.

special_k83

RobertoMoir wrote: »

Well yes, but as a practical matter how else other than re-mortgaging would you suggest that the majority of the people are going to repay that massive loan when it comes due?

Well I bought a 4bed on this scheme. The 75% was the same price as the 2bed non new builds I was looking at in the same area so to me it is the same as buying a 2 bed now then selling in up to 10 years time and buying a bigger house with a bigger mortgage.

I don't think I'd consider buying a 2 bed on this scheme as that wouldn't work for me personally in the long term.

samgoss

Hi, can anyone confirm categorically whether the 25% you pay back is 25% of the original price or 25% of the house price when you pay back the second charge loan? I'm pretty sure it's 25% of the house-price at the time of repayment - but is this still true if prices go down? So long as the house price is fairly valued on completion (unlikely), that would have to be a good deal - the builder covers you for 25% of the reduction in prices, effectively?