New build house prices

jackc144

My girlfriend and I reserved a new build property due to be completed in December, but due to corona and construction being halted it will be later than expected.  

The question I have and would appreciate some information about would be what happens if the price of property drops due to the market changes brought by corona. Just for clarity we have only reserved the house so could walk away but would rather not. 

Does the price set by the developer remain the price because it’s a new build ?

Any help would be greatly appreciated ! 

Vestraun

Up to exchange everything is still on the table but you may lose your reservation fee. 

jackc144

Thanks for the response 😊
I understand we will loose the reservation fee if we walk away, my concern is more about not being able to get the funds from a lender if the market price drops but the developer won’t budge on the price. 

My question was more about the house price and what would happen if the market prices dropped. Would the price of the house drop or would the developers be able to keep the price they have set as it’s a new build there’s no bidding involved.  

Sorry if it wasn’t clear ! 

davidmcn

jackc144 said:

Thanks for the response 😊
I understand we will loose the reservation fee if we walk away, my concern is more about not being able to get the funds from a lender if the market price drops but the developer won’t budge on the price. 

My question was more about the house price and what would happen if the market prices dropped. Would the price of the house drop or would the developers be able to keep the price they have set as it’s a new build there’s no bidding involved.  

Sorry if it wasn’t clear ! 

Until such time as you exchange contracts then in theory everything is still up for negotiation. But if the market value has fallen significantly then why would the developer insist on getting the previous price? Who's going to pay it?

DCFC79

davidmcn said:

jackc144 said:

Thanks for the response 😊
I understand we will loose the reservation fee if we walk away, my concern is more about not being able to get the funds from a lender if the market price drops but the developer won’t budge on the price. 

My question was more about the house price and what would happen if the market prices dropped. Would the price of the house drop or would the developers be able to keep the price they have set as it’s a new build there’s no bidding involved.  

Sorry if it wasn’t clear ! 

Until such time as you exchange contracts then in theory everything is still up for negotiation. But if the market value has fallen significantly then why would the developer insist on getting the previous price? Who's going to pay it?

You will find out nearer the time. 
No one can say for sure what will happen.
It would be nice for the price to be reduced. 

bucksbloke

Do you believe the market price for the houses has dropped?

SouthLondonUser

In addition to what the others have said, I'd be very worried about newbuilds being hit harder than other properties if house prices start to go down. There has always been a newbuild premium, often not justifiable by the fact that you don't need to refurbish, and in recent years it's gone up and up because of the ill-judged help to buy.

jonnym8083

We reserved a new build for 310k we had it valued came back 290k. We then was advised to get another valuation came back at 280k.
we were then stuck as builder wouldn’t budge and we couldn’t get the finance from a valuation. 

Builders called us about week ago and said they’ll match the 290k. I said no we wanted the lower valuation of 280k matching.
next day came back and agreed.
if house prices do drop slightly we have already negotiated the new build premium off the price.

Vestraun

jonnym8083 said:

We reserved a new build for 310k we had it valued came back 290k. We then was advised to get another valuation came back at 280k.
we were then stuck as builder wouldn’t budge and we couldn’t get the finance from a valuation. 

Builders called us about week ago and said they’ll match the 290k. I said no we wanted the lower valuation of 280k matching.
next day came back and agreed.
if house prices do drop slightly we have already negotiated the new build premium off the price.

What were the dates on this? Would be interested in hearing the period it dropped from 290 to 280. 

jonnym8083

Like in the last week 

SouthLondonUser

But how does it compare with non-new builds? THIS is the key point