New build - Market downturn risk?

NewBuild21

davidmcn said:

I suggest you talk to them again to clarify. Like we've said, it's not how things usually happen.
Some of the issues in those articles are because of mortgage offers expiring before completion (or never existing at the point of exchange), not lenders changing their minds about valuations during the life of the offer.

Thank you, I've e-mailed him and asked for another call later today to talk through it. 
The 'new build' process is just so different to a normal purchase that it's taking me a while to get my head around it. 

AdrianC

NewBuild21 said:

The 'new build' process is just so different to a normal purchase that it's taking me a while to get my head around it. 

Off-plan?
Of course it's different. You're buying something that simply doesn't yet exist when you buy it.
You are expecting the developer to be tied to your early reservation, and not change their mind and sell it to somebody else... so why wouldn't you also be tied to it?
Remember, some of the build will be to your specification. You get to choose how it's built, even though you haven't bought it yet. What if you want to choose a hideous mis-match of kitchen doors, tiles, worktop - then pull out...?

Crashy_Time

Don`t put your life savings anywhere near a new build, or any property for that matter IMO.

Hannimal

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

RelievedSheff

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

Racky_Roo

When I agreed the sale of mine off plan (6 months before it would be ready) I took the risk the price might drop as we had just come out of lockdown 1. As it happened, the builders sold quite a few properties really quickly so bumped the price up of the remaining plots by £15k. Buying off plan does have the benefit of getting in first on plot choice and deciding on finishes so there's plus's and minuses for waiting until later. Make sure you negotiate freebies BEFORE you reserve. There was a thread on here recently where someone reserved then wanted to see if they could negotiate on upgrades.

Crashy_Time

RelievedSheff said:

Hannimal said:

Also don't listen to Crashy...

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

What really counts though is what a buyers lender values it at?

AdrianC

RelievedSheff said:

Hannimal said:

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

Obvs, some new-builds will appreciate in value.

But, as a rule of thumb, it's fairly obvious that they won't. Just think about it...
Brand spankin' - vs - lived in for several years.
10yr warranty - vs - remaining balance of warranty.
Choose spec - vs - somebody else's spec.
HtB - vs - no HtB.

That's why new-builds lose value.

davidmcn

AdrianC said:

RelievedSheff said:

Hannimal said:

But seriously though, only buy a new build if you plan on living there for quite some time. The moment you complete the sale the value of the property goes down. It's not a huge concern if you plan on living there for a few years and perhaps you shouldn't think of your home as an investment that will increase in value. 

We were told that the price of our new build would drop when we bought it. We have just gone through the remortgage application after 2 years in the property and our new lenders surveyor has valued it at 10% over what we paid for it 2 years ago. 

Obvs, some new-builds will appreciate in value.

But, as a rule of thumb, it's fairly obvious that they won't. Just think about it...
Brand spankin' - vs - lived in for several years.
10yr warranty - vs - remaining balance of warranty.
Choose spec - vs - somebody else's spec.
HtB - vs - no HtB.

That's why new-builds lose value.

Even worse if the builders are still there flogging shiny new ones round the corner from yours.

tim_london

Isn't that flawed logic?  Yes you will lose value if you tried to sell it on day 2 of moving in because the 'new' factor is gone, but after 5 years the property prices in general would have increased.  So you'll still gain, just not as much as if you moved into an old banger where you would have needed money to fix up.