Delayed Completion on New Build

EmmaM66

We are in a bit of a fix with a potential New Build purchase. Due to Covid my own property equity is invested and is not able to be released before its annual maturity date which is the middle of January. We are looking to buy a property under the Help to Buy scheme (and to take advantage of the no stamp duty option too) and, while we can easily afford the mortgage payments, the numbers on paper to meet the criteria, say we can't as at today. We do not want to lose the new build house - it's taken us so long to find it! However, once contracts are exchanged, is it possible to delay the completion until the end of January as my equity is available to use as part of the deposit (20% of the purchase price - another 20% of the purchase price will be the deposit from my partner) and to allow us to get the mortgage approved with the numbers that will tick the Help to Buy boxes?
This delayed completion will impact nobody else. My partner is selling his property right now (exchange due late Sept/early October) and we will move into rented accommodation in the interim.

OldMusicGuy

Just ask the developer. They usually like to exchange quickly after reservation (within 28 days pre-COVID) but often will then have a later completion date. We exchanged in May and are completing next week.

A lot depends on the build status and schedule. If the house is built already they probably will not want much of a delay but if you are buying off plan they may be flexible. The "delayed" completion will impact the builder if they think they can sell the property to someone else before you are ready to complete. 

EmmaM66

Hmm, thanks - its built but not finished inside, flooring is being laid but not much else left to do. Its also one of the last 3 properties on the development that they are selling - the last being the show home.

OldMusicGuy

If you exchange by say the end of October, then completion by end January isn't actually that much of a delay. The key question is are you prepared to take the risk of exchanging and tying yourself into a completion date to which you are legally committed? New build developers aren't like private sellers - once you have specified a completion date they will hold you to it and may not be flexible. Best thing is to talk to the sales agent there. 

bucksbloke

EmmaM66 said:

We are in a bit of a fix with a potential New Build purchase. Due to Covid my own property equity is invested and is not able to be released before its annual maturity date which is the middle of January. 

If you own a property, you will not actually be able to use the Help to Buy scheme without selling it. 

EmmaM66

Thanks @Bucksbloke - I did mention my partner is selling his, without that sale we can't purchase at all! I have nothing to sell. We know we are eligible for the Help to Buy at the moment.

fiisch

You'd have to ask the individual builder, but in my experience with new builds, invariably not.  It's a very one-sided relationship buying a new build (I'm a sucker for shiny new things), and particularly if developer is nearing end of site, they will want houses completed as soon as possible.

AdrianC

EmmaM66 said:

We are in a bit of a fix with a potential New Build purchase. Due to Covid my own property equity is invested and is not able to be released before its annual maturity date which is the middle of January. We are looking to buy a property under the Help to Buy scheme (and to take advantage of the no stamp duty option too) and, while we can easily afford the mortgage payments, the numbers on paper to meet the criteria, say we can't as at today. We do not want to lose the new build house - it's taken us so long to find it! However, once contracts are exchanged, is it possible to delay the completion until the end of January as my equity is available to use as part of the deposit (20% of the purchase price - another 20% of the purchase price will be the deposit from my partner) and to allow us to get the mortgage approved with the numbers that will tick the Help to Buy boxes?
This delayed completion will impact nobody else. My partner is selling his property right now (exchange due late Sept/early October) and we will move into rented accommodation in the interim.

So right now you're 40% short of affording the purchase, with an expectation of 60% coming from mortgage + HtB? You can't inject ANY of your 40% equity...?

What happens if your partner's sale falls through? You've got several weeks until exchange is expected...

Can you not cash the investment in at all, even at an early redemption, loss-of-interest cost?

EmmaM66

Nope - not available early as stated.  And yes, always that chance that the sale will fall through for my partner. 

bucksbloke

EmmaM66 said:

Thanks @Bucksbloke - I did mention my partner is selling his, without that sale we can't purchase at all! I have nothing to sell. We know we are eligible for the Help to Buy at the moment.

Are you buying jointly, or your partner buying in his sole name? You said "we" and that you have equity in a property that you have an interest in?

EmmaM66 said:

.....Due to Covid my own property equity is invested and is not able to be released before its annual maturity date which is the middle of January. We are looking to buy a property under the Help to Buy scheme (and to take advantage of the no stamp duty option too) and, while we can easily afford the mortgage payments, the numbers on paper to meet the criteria, say we can't as at today. We do not want to lose the new build house - it's taken us so long to find it! ....

If you are buying this house and have an interest in another property, you will not be able to proceed without selling it. 

Your solicitor will be required to certify to HCA Target that you won't have an interest in any other dwelling on completion. See page 4 of the Information for Solicitors/Legal Representatives which states the solicitor must do the following

If you retain an interest in any property, you cannot use Help to Buy as the Government believes you don't need the help to buy. 

EmmaM66

Thanks - we know we are eligible for HtB already, we have already cleared all this so sorry if that is not apparent in my question. We, as in my partner and I, are buying this new build jointly once he has sold his, which is the only property he owns. I have nothing to sell and own no property - I have money invested right now - the equity from the sale of my property 4 years ago.
This is going a bit off piste now but thanks for your input, much appreciated.