Help - mid new build first time purchase

demontfort

White and Green, I've seen the adverts, the prices are crazy even by London standards. I cycle down Vallance Road on my way back from work, it's a nasty, grimy area with narrow traffic choked roads next to one of the main railways out of London. I wouldn't choose to live there, even before this pandemic this development looked like a outlier based on price and location. Go spend half and hour on Vallance Road and ask yourself would you really pay £555k to live in a pokey flat there.
Have a look a 2 miles further east you could get a nice new build 2 bed  in Hackney Wick which is a more pleasant area with the Olympic Park and Victoria Park next door for the same price. Plus Stratford and Hackney Wick stations are still in zone 2. I also think Hackney Wick is grossly overpriced but far less so White and Green.

OldMusicGuy

robtam said:

Just wanted to give everyone an update from the developer after I sent an email trying to reopen negotiations: 

Thanks for sharing, it's interesting to see their response. Any thoughts from your side on what you will do?

numbercruncher8

I lived East so I know the area well. It is a strange old area, of course there is fantastic transport links but also a faint whiff of poorness in the air. There will be shiny new high-rises next door to ramshackle old flats, but I suppose many areas of London are like this. But then again, Old Street/Shoreditch/Brick Lane became trendy off this sort of stuff, very likely that Whitechapel will improve in future as it will be a key station.

Indeed, £550k is expensive for a flat there. TBH I would imagine it would be difficult to resell it for that. There are several new builds which are a few years old from £350k - that's £200k less. Admittedly most of these would take a hit on location and also niceness. But this one (https://www.rightmove.co.uk/property-for-sale/property-65741124.html) I think is fairly comparable in terms of size/location....if you're coming to sell in the short term there is a good chance it won't be as much as £550k.

Going to a slightly higher price, you would get a lot more (ie 2 bedrooms, 2 bathrooms), but then it can't be bought with HTB. So I think the competition in terms of buyers for these flats would all be using HTB, and it may be quite natural to have the same doubts. 

Prices in London are falling, IMO. You have places like this (https://www.rightmove.co.uk/property-for-sale/property-65785728.html) which seemingly aren't shifting - a look at the sold nearby shows the sales are a trickle and at levels above.

Crashy_Time

numbercruncher8 said:

I lived East so I know the area well. It is a strange old area, of course there is fantastic transport links but also a faint whiff of poorness in the air. There will be shiny new high-rises next door to ramshackle old flats, but I suppose many areas of London are like this. But then again, Old Street/Shoreditch/Brick Lane became trendy off this sort of stuff, very likely that Whitechapel will improve in future as it will be a key station.

Indeed, £550k is expensive for a flat there. TBH I would imagine it would be difficult to resell it for that. There are several new builds which are a few years old from £350k - that's £200k less. Admittedly most of these would take a hit on location and also niceness. But this one (https://www.rightmove.co.uk/property-for-sale/property-65741124.html) I think is fairly comparable in terms of size/location....if you're coming to sell in the short term there is a good chance it won't be as much as £550k.

Going to a slightly higher price, you would get a lot more (ie 2 bedrooms, 2 bathrooms), but then it can't be bought with HTB. So I think the competition in terms of buyers for these flats would all be using HTB, and it may be quite natural to have the same doubts. 

Prices in London are falling, IMO. You have places like this (https://www.rightmove.co.uk/property-for-sale/property-65785728.html) which seemingly aren't shifting - a look at the sold nearby shows the sales are a trickle and at levels above.

You would feel like an extra in Das Boot living in that, absolutely horrendous quality of life, no wonder they are not shifting!

robtam

OldMusicGuy said:

robtam said:

Just wanted to give everyone an update from the developer after I sent an email trying to reopen negotiations: 

Thanks for sharing, it's interesting to see their response. Any thoughts from your side on what you will do?

Personally think it’s a load of rubbish. Do you believe anyone is paying to reserve flats now??

Going to wait for valuation and hope this segways into negotiations 

robtam

numbercruncher8 said:

I lived East so I know the area well. It is a strange old area, of course there is fantastic transport links but also a faint whiff of poorness in the air. There will be shiny new high-rises next door to ramshackle old flats, but I suppose many areas of London are like this. But then again, Old Street/Shoreditch/Brick Lane became trendy off this sort of stuff, very likely that Whitechapel will improve in future as it will be a key station.

Indeed, £550k is expensive for a flat there. TBH I would imagine it would be difficult to resell it for that. There are several new builds which are a few years old from £350k - that's £200k less. Admittedly most of these would take a hit on location and also niceness. But this one I think is fairly comparable in terms of size/location....if you're coming to sell in the short term there is a good chance it won't be as much as £550k.

Going to a slightly higher price, you would get a lot more (ie 2 bedrooms, 2 bathrooms), but then it can't be bought with HTB. So I think the competition in terms of buyers for these flats would all be using HTB, and it may be quite natural to have the same doubts. 

Prices in London are falling, IMO. You have places like this which seemingly aren't shifting - a look at the sold nearby shows the sales are a trickle and at levels above.

Yes I’m a local key worker in a secure job in healthcare. Realistically it’s a 5-10 year place. I’m sure the market would recover in 5-10 years. I was born in east London so the poorness isn’t a big problem as it’s all I have ever known 

OldMusicGuy

robtam said:

Personally think it’s a load of rubbish. Do you believe anyone is paying to reserve flats now??

Going to wait for valuation and hope this segways into negotiations 

Right now? Maybe some but not many. I think the property market is pretty dead for new transactions. Clearly the developers are trying to give the impression they don't feel under pressure yet but that may change. I've been monitoring the areas in which we were looking and there is less property on the market. For new builds, one of the developers is offering some new incentives (such as we'll pay your mortgage for a year), others don't seem to have changed their marketing stance. 

FWIW I think the flats look very nice, the area is "interesting" but then I'm not from round those parts. 

numbercruncher8

That makes sense. I suppose it would be a bit of a culture shock for someone coming from outside London to move to those areas but if you already have local knowledge it makes it a lot easier.

I bought last time before the global financial crisis in 2007.... prices dipped in London for sure in the next couple years but recovered before the Olympics. After the Olympics things went crazy... I think my place doubled from the bottom. However this was fuelled by an incredible fall in interest rates (mortgage went from near £1,500 a month to just over £900 a month in this time) and HTB coming in. BTL also became really popular and fuelled a price rise on flats especially which saw people upgrading. Someone I knew bought a flat at £250k and sold at £350k 18 months later, profit was too good to turn down.

I don't see an equivalent interest rate fall in the next decade, and I think the HTB prop will not be greatly improved (and is slated to end in 2023). All things being stable house prices should just rise at the rate of wage increases (although my own opinion is that real inflation will outstrip wage rises). Over a longer period they will recover; depending on the size of the fall it may take several years in my view.

Some things to consider is that expanding the search area a bit more, there are loads of new builds across East London. Another thing is your own personal circumstances and current deposit. IMO HTB is simply a bet on your own future to buy a nicer property now. If you don't need a new build at all, you could pick up a 1-bed in an older block for maybe half that cost. A friend did this and refurbished it, it's better than some new builds inside. The only thing lacking is the nicer communal areas and perhaps a slight less feeling of security, although as a Londoner you will already have the smarts on what to do.

Anyway good luck and all that, I think you're in a strong position... if you have no immediate need to move right now I think the risks of waiting to see what happens is fairly minimal. 

RelievedSheff

robtam said:

OldMusicGuy said:

robtam said:

Just wanted to give everyone an update from the developer after I sent an email trying to reopen negotiations: 

Thanks for sharing, it's interesting to see their response. Any thoughts from your side on what you will do?

Personally think it’s a load of rubbish. Do you believe anyone is paying to reserve flats now??

Going to wait for valuation and hope this segways into negotiations 

We are not in London but the new build estate that we are on are still taking reservations on properties.

They have lost a few sales judging by the available plots on the website but at the same time they are still getting plots reserved so there is still some sales movement in the new build market.

We have also noticed that a few older properties in the area have also come onto the market and sold in the last couple of weeks so people are still buying in this area at least.

robtam

What I find most interesting that despite her email - there are subsequent SMS messages sent advising of “unexpected returns to the market” 

I find it all quite offensive unfortunately