FTB in London-New Build-What areas to look at?

mn92

Hi all,

I am seeking a bit of advice and guidance where to buy a new build house in London as FTB.

I will be buying with my partner and our combined annual income is £89k including bonuses. In terms of deposit, we will have around £35k saved by April 2020. We are thinking of buying a new build house or flat using the Government HTB equity loan scheme. Our max target price would be £450k, however we could probably afford slightly more (but don't want to max out our capacity).

If my maths are correct I am looking for the following initial costs which would be covered by the 35k saved up until April 2020:

1. House price = £450,000
2. 5% Deposit = £22,500
3. Stamp duty = £7,500
4. Legal Fess etc. = £3,000 (approximately?)

Total cash needed for initial costs = £33,000

The questions that I have are the following:
1) When should we start looking for properties? (taking into account that new builds aren't immediately available to move in and do the mortgage). Do we start now even though we don't have the amount needed or should we wait until we have all the amount needed saved up?
2) Where would you suggest looking with the budget that we have? We are thinking initially up to zone 3-4 but if there is a good opportunity we wouldn't say no to going further outside of London (with good transport links to central London).

Thank you

bouicca21

Do you really want a new build? they have tiny rooms and IMHO the availability of help to buy inflates the price to the benefit of the developer rather than the buyer (when you sell your buyer won't get help to buy). Service charges on new builds can be dodgy.



Gripe over - as to location, you need to think about transport. Where do you work, how will you get there and at what cost (in time as well as money). Will you be commuting by train/tube/bus or car?


Oh, and what do you want from the area? Cafes, restaurants, shops, night clubs? Or super quiet with acres of housing and little else? Green space?



Your budget would get a nice flat round my way but there wouldn't be much point if the commute were all wrong.

mn92

bouicca21 wrote: »

Do you really want a new build? they have tiny rooms and IMHO the availability of help to buy inflates the price to the benefit of the developer rather than the buyer (when you sell your buyer won't get help to buy). Service charges on new builds can be dodgy.

Gripe over - as to location, you need to think about transport. Where do you work, how will you get there and at what cost (in time as well as money). Will you be commuting by train/tube/bus or car?

Oh, and what do you want from the area? Cafes, restaurants, night clubs? Shops? Or super quiet, with acres of housing and little else?

Your budget would get a nice flat round my way but there wouldn't be much point if the commute were all wrong.

Yeah true, I know if I am going with the new build, I will be getting an inflated price. It would just be so much easier to buy with my mentioned deposit (maybe I am wrong on this)

My work is near Moorgate/Bank Station, so I would need tube/train link to these stations. In terms of locations, I would be prefer somewhere with cafes, restaurants, shops.

What location are you referring to?

mark55man

so just a general observation - you seem to be willing to pay a lot for convenience of the new build. I feel you may regret this later as that is money that you may well need, as well as my general feeling that new build doesn't protect you from all the problems of property ownership

I would definitely take advantage of the time you have before you need to move to maybe look at some properties along the relevant tubes (central/circle/district) which pretty much covers everything from on an east west corridor from Uxbridge to Stratford or Wimbledon/Richmond to East End.

The other thing is if both you and your partner work, then will you be socialising near work or near home. It would be best if you had possibilities either end of the commute, but that will come at a cost.

D_M_E

If it were me, I would base the purchase price on salaries without bonus - bonus is not always guarranteed - and look for something a little older which is also likely to be larger in size.

May not be where you want to be but could be worth looking in another area.

bouicca21

My work is near Moorgate/Bank Station, so I would need tube/train link to these stations. In terms of locations, I would be prefer somewhere with cafes, restaurants, shops.

What location are you referring to?

I'm in SE London (zone 4). It wouldn't take long to get to Moorgate, in fact the journey on one nearby line would be just over half an hour. But you wouldn't want to do it! Changing at London Bridge for the tube would be horrid. The ideal commute will not involve changing trains. If you have to, you have to, but avoid changes if you can.


I'd be looking at places along the lines that go directly into Moorgate.

mark55man

I agree about not changing. eg Monument very near bank is like 5 minutes walk, I would far rather do that every day than change.

if I was designing my day it would be to include some walking every day - as a regular supplement to whatever other keep-fit you do

zagubov

You might want to look in South London rather than north. Places that link to the northern line.

I don't rate new-builds and there are no real bargains in London.

hazyjo

Don't forget the C2C line which goes into Fenchurch Street station, and the overhead trains into Liverpool Street station. Also overheads into Moorgate going out towards Herts.

I would also want to buy without the HTB.

rachel230

You have a reasonable deposit/combined salary.
Please think carefully about buying a new build if you can buy an alternative property.
Overpriced
Generally poorly built
Uncapped and unregulated service charges
Often councils do not adopt the estate, resulting in owners paying a fortune in estate fees (as well as full council tax)
Escalating ground rent
Permission fees
Potential problems if you want to sell

If you are in a position to buy freehold then your home won't be used as someone else's investment and you will have financial control.
Shared Ownership/Help to Buy has become a poisonous model of home ownership.

mn92

Thank you all for your responses. Generally I see a theme from the majority of the responses that we should look at non new build properties without the help to buy scheme. We probably have to rethink what we are going to buy....and maybe wait a bit longer to have a larger deposit so that we can afford a 90% LTV mortgage on a non new build house.