Exchanging on a new build house

Nuggy96

Hi,
I have come for advice, as we are first time buyers. My wife and I currently are in the process of purchasing a new build house that was supposed to completed by May, but has now pushed to July/August earliest due to Covid-19. We have yet to exchange contracts and all our deposit money is currently being held in Moneybox LISAs. My conveyancer yesterday emailed over all the search documents and a copy of the contract for us to sign. The completion date she said was going to be "on notice" and there does not appear to be any long stop date, she also said the developers wanted us to exchange contracts ASAP. 
My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.
2) the other issue is that our money is being in Lifetime ISA, if we say exchanged on 1st May, the LISA clock starts ticking and we would have to complete by 90 days or the bonus gets wiped off, we can apply for a 60 day and then a following 30 day extension so overall 6 months theoretically, but say the house isn't completed by 1st November, we would lose the bonus on our 10% deposit.
3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.
Can someone please clarify what I am saying is correct, and any advice would be gratefully appreciated, as I say we are FTB and its all a bit overwhelming and extra stress added to this whole process.

Thanks in advance, and hope you are all staying safe.

Nuggy96

Bumppppppp

AdrianC

Nuggy96 said:

My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.

Yep, that's the risk. But - of course - look at it from the dev's PoV. They don't know when they can get guys back on site and working... One thing's for sure, they'll want to get the exchanged properties sold asap, simply for cashflow.

3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.

Yes, it's a possibility. The other option, of course, is "don't exchange yet".

davidmcn

Nuggy96 said:

there does not appear to be any long stop date

Why not? Had you discussed one? Hasn't your conveyancer recommended negotiating one? I hope you're not using a conveyancer "recommended" to you by the developer...

Nuggy96

davidmcn said:

Nuggy96 said:

there does not appear to be any long stop date

Why not? Had you discussed one? Hasn't your conveyancer recommended negotiating one? I hope you're not using a conveyancer "recommended" to you by the developer...

I only received the contract on Thursday have emailed my solicitor but not got a reply yet, so just thought I’d ask I if I was being reasonable. I didn’t Use the developers solicitors but mine seem a bit slow. Getting some slightly worried.

bucksbloke

I live on a Taylor Wimpey site, I know from people who have exchanged recently that all sales contracts have a COVID19 clause now allowing you to walk away with return of deposit if you cannot complete for a reason connected with COVID19 including mortgage etc. I would ask for that also for a long stop date. 

Nuggy96

Mickey666 said:

Don't exchange contracts without having a completion date.  Simple. 

If the seller/developer says they can't give a completion date because of this, that or the other, just say 'fair enough, we understand, just let us know when you can'.

Ok, so just speak to my solicitors to tell the developers solicitors that we won’t exchange until we get a finalised completion date and a long stop date?

i assume this is normal. Just don’t want to be a pushover but also not unreasonable

Nuggy96

AdrianC said:

Nuggy96 said:

My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.

Yep, that's the risk. But - of course - look at it from the dev's PoV. They don't know when they can get guys back on site and working... One thing's for sure, they'll want to get the exchanged properties sold asap, simply for cashflow.

3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.

Yes, it's a possibility. The other option, of course, is "don't exchange yet".

But ‘don’t exchange yet’ doesn’t that come with the risk of losing the reservation?

AdrianC

Nuggy96 said:

AdrianC said:

Nuggy96 said:

My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.

Yep, that's the risk. But - of course - look at it from the dev's PoV. They don't know when they can get guys back on site and working... One thing's for sure, they'll want to get the exchanged properties sold asap, simply for cashflow.

3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.

Yes, it's a possibility. The other option, of course, is "don't exchange yet".

But ‘don’t exchange yet’ doesn’t that come with the risk of losing the reservation?

It may well do, yes.

Nuggy96

AdrianC said:

Nuggy96 said:

AdrianC said:

Nuggy96 said:

My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.

Yep, that's the risk. But - of course - look at it from the dev's PoV. They don't know when they can get guys back on site and working... One thing's for sure, they'll want to get the exchanged properties sold asap, simply for cashflow.

3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.

Yes, it's a possibility. The other option, of course, is "don't exchange yet".

But ‘don’t exchange yet’ doesn’t that come with the risk of losing the reservation?

It may well do, yes.

So stuck in a potential lose lose situation. GIven we have speny £900 on options, £500 reservation and £1k+ solicitors/searches

davidmcn

Nuggy96 said:

AdrianC said:

Nuggy96 said:

My issues are:
1) I exchange now, there's no completion date, Covid-19 could stall by an unknown period of time and with no exact completion date and no long stop date, we would be stuck into purchasing this house indefinitely, say over 12 months (unlikely, but unknown circumstances). The house has been built, the garage still has not been completed and the developers have been quite poor in updating where are at during this period.

Yep, that's the risk. But - of course - look at it from the dev's PoV. They don't know when they can get guys back on site and working... One thing's for sure, they'll want to get the exchanged properties sold asap, simply for cashflow.

3) Final issue our mortgage offers runs out on 13th July, but Bank of Ireland and my financial advisor have said that a 3 month extension is likely, but even that would push us only to 13th October.
Obviously, this is looking at worse case scenario of the house being pushed back until post-October, but am I being unreasonable thinking that is a possibility in the current circumstances.

Yes, it's a possibility. The other option, of course, is "don't exchange yet".

But ‘don’t exchange yet’ doesn’t that come with the risk of losing the reservation?

Only if the builder can find somebody willing to take more risks than you. Not sure how likely that is at the moment.