First-time buyer - deposit on a new build

nkiddie94

Hi there, my partner & I are currently thinking of buying our first home, a new build from Redrow. However, we have concerns over the deposit process. We are being asked to pay a £500 reservation fee (which is fine), but then being asked to pay the deposit within 42 days of us paying the reservation fee. We have been told the house is due to be completed in September, but obviously with the current COVID-19 situation, the likelihood is that this will be significantly delayed, and yet Redrow are insisting that the deposit would have to be paid on exchange, which would be within the 42 days. For us, this seems a bit unfair because there is still so much uncertainty and would much prefer to pay the deposit closer to the time we have a completion date. What are people's experiences on paying deposits etc. and do you think we have a case that this should be pushed back? Thanks in advance.

hazyjo

How far ahead are they with the build? Is it nearly finished or needing a lot of work still?

September suggests a lot needed - and their sites are now closing so I can't see how they could say September unless they've taken closure of a few months into account...

nkiddie94

Looks as though most of the outside is complete, and the roof is on, but it is completely empty inside, lots of scaffolding, etc. still up. They said September before all of this happened so i definitely don't think this has been taken into account. So would you say paying the deposit in mid-May for example would be too early?

hazyjo

I should imagine they'll be closing everything soon so I'd just sit tight and wait for them to reopen. Nobody really knows right now. I'd be very reluctant to pay anything tbh or to agree to pay a price. I would be worried about not getting the mortgage (especially if you have a low deposit) or about prices dropping. IMO it's likely to be downvalued in say 6 months' time. But who knows! Strange and curious times!

nkiddie94

what is the concern about not getting a mortgage or the prices dropping? If we are agreed a mortgage now, would that change by the time it comes to completing? Sorry, we're very new to this! 

hazyjo

Most mortgage offers expire after 6 months. Some sooner. If the value drops by say £50k, you may find you're committed to buy but with less mortgage to buy with. So unless there's a get out clause, be careful.

hazyjo

btw even with a get out clause (long stop date), if you've ordered lots of extras, you'll prob find you still have to pay for them.