New completion date near our baby due date

Whty271

Hi All,
We are buying our first house - new build, intended to exchange and complete in April and we’ve just heard it’s now going to be end of September.
Our first baby is due first week of October so feel this could be a lot of stress for my OH.
What would you do in this situation?
We already had concerns about negative equity (5% deposit, 20% HTB) since the Virus started. We are living with my wife’s parents too so we need a home before the baby is born.

Thanks

[Deleted User]

Whty271 said:

Hi All,
We are buying our first house - new build, intended to exchange and complete in April and we’ve just heard it’s now going to be end of September.
Our first baby is due first week of October so feel this could be a lot of stress for my OH.
What would you do in this situation?
We already had concerns about negative equity (5% deposit, 20% HTB) since the Virus started. We are living with my wife’s parents too so we need a home before the baby is born.

Thanks

Hold off buying and move into rental property before the baby is born.

Sncjw

Why are you concerned about negative equity. Are you planning to move shortly after moving in

GDB2222

Sncjw said:

Why are you concerned about negative equity. Are you planning to move shortly after moving in

I’d be very, very concerned about negative equity. It usually means that you cannot move house, even if your needs change. You won’t be able to renew your mortgage onto a new cheap deal, and will end up on the SVR. A Which? survey  showed that the SVR is twice as expensive. You could be forced to sell if your circumstances change, thus crystallising the debt.

It’s a catastrophe. There are reasons why you might be prepared to take the risk, but it’s a mistake to think that it won’t matter.

davidmcn

If you need to move before the baby is born then you'd better find somewhere else to stay - anticipated timescales for newbuilds are unreliable enough at the best of times, I wouldn't place any faith in them in present circumstances.

pinkteapot

Assume you haven't exchanged yet?

I would take the September date with a pinch of salt. They're guessing at the moment and it could easily be delayed further. In the current situation, the only way to guarantee being in your own place before the baby arrives is to move into a rental. Even in normal circumstances, finding a different house to buy now would offer no guarantee of completion by September. 

One thing to consider is whether you'll qualify for the same mortgage after the baby comes, as an extra dependent will impact your affordability. How tight was the mortgage before? Did your OH's salary help secure the mortgage? (Possibly not if she was already pregnant when you applied).

Sit down and go over your budget carefully. The first couple of years in a new house are always a financial strain. As time goes on, pay rises (even small ones) start to reduce your mortgage payment as a percentage of your income. Plus there's always things to buy when you move to a new house, not matter how cheaply you do it. A new baby also puts a financial strain on due to loss of income (depending on maternity benefits). If there's any real risk that you could get into trouble and be forced to sell up, then don't buy now given uncertainty in house prices for the next few years. If you'd be able to ride things out then any possible negative equity doesn't matter, as it's only an issue if you need to sell while in negative equity.

Doozergirl

On the bright side if things, you aren't paying rent so can continue to save.  

If it does coincide then I'm sure the in-laws won't mind for a week or two whilst you settle the baby in.   As long as your partner doesn't have to do much, it won't be too bad.  There's a benefit to it being brand new, so at least there's no work to be done.   I hated every minute I've ever rented a house, so that wouldn't be an option for me. 

Have you exchanged?  How about renegotiating?  

Things will settle again.  If you aren't moving soon then fluctuations won't matter too much, but of course it's worth keeping your options open for the next few months if you can.  You might find a bit of a deal, but supply will be fairly short.  

Comms69

This sounds like a total disaster - rent somewhere.

You are putting all your eggs in one basket at a risky time, with a baby to boot.

steampowered

Have you exchanged contracts? If not, I'd wait.

If you have exchanged contracts, you can hope for the best, but there is a risk of further delays so may want to consider extending your rental so there is a bit of overlap.

The other thing to think about is whether your mortgage offer is still valid for a completion in September. Most mortgage offers are only valid for 6 months.

Whty271

We haven’t exchanged yet, spoke to the Developer yesterday and they confirmed the build schedule says ours will be completed end of August rather than September. It was initially meant to be February so we are aware these dates change.

Thanks for all your comments, I think we are going to progress, end of Aug completion gives us approx 6 week possible delay window, any 2nd wave would probably impact all of our options so just have to hope.
it’s hard to predict what will happen over the next 18 months but I feel a stable home for the baby is my number 1 priority so would prefer to have them grow up in 1 house and take the hit on a decline. Done some creative projections etc and we know we can afford this based on our 5 year fixed and current SVR if things went south.

Cheers all, appreciate it

GDB2222

I thought that, at the moment, most transactions are done on the basis of exchange and completion on the same day?

In any case, the builders can show you their current building schedule, but it’s complete fiction until they are actually back on site building. And they won’t do that until they Have sold some more. At the moment, the sales guys will tell you anything at all to keep you interested. You’re being taken for a ride. 

It may all work out, if the lockdown ends and the economy picks up, but then again it may not. As you can’t put the baby on hold, you ought to keep your options open and have a plan B.