Bellway - New Build and Reservation Fees

RandomGuy87

Hi all

I am seeing Bellway tomorrow about a new build. The house is nearly finished but only the finishing touches inside need completing. I have spoken to the New Homes Mortgage Helpline this morning who have done a qualifying check and passed me for this. They are running an Agreement in Principle today so that we will have more information to give Bellway when we speak to them.

Has anyone dealt with Bellway recently with regards to completions times and reservation fees? From what I have seen online, it may be £250.00 to reserve the house/plot, if I pay this, how long would it last for - can we negotiate this?

The only reason I ask is because the house looks like it is almost complete however I would need to give notice before leaving my current rental. Would they take this into account or expect us to manage both?

eddddy

The normal process for new builds is:

• You pay the reservation fee, then you have 28 days to exchange contracts.
• (That's 28 days for your solicitor to sort out the legal stuff and for you to get a mortgage. Once you exchange contracts, you are legally committed - you can't change your mind [unless you have a longstop date and it passes])

• At some point after exchanging contracts, you will usually be given 10 days notice to complete.
• (The developer might give you an indication in advance of when that date will be. But the date often slips.)

Some people might think that "New Homes Mortgage Helpline" is some kind of organisation (perhaps government backed) with a mission to help home buyers.

Looking at their website, they're not. It looks like they're just a standard mortgage broker business. It seems to be a division of Connells Group - they are primarily a firm of estate agents. Are you buying through a Connells Group estate agent?

Other mortgage brokers might be able to find better deals, or charge you lower fees.


It's also often best to avoid solicitors / conveyancers who are recommended by estate agents or developers.


 

Noneforit999

We bought a new build via Bellaway, albeit 7 years ago.

Reservation was £500 but from that point you have 28 days to exchange contracts...supposedly. Ours took about 40 ish days but as long as the developer can see its not you holding things up, i.e. being lax on returning paperwork etc then they are not suddenly going to pull out the rug and ditch you as a buyer. If you are 8 weeks in and no exchange, they might start to put the pressure on though.

I would doubt the £250 is negotiable for reservation, its a tiny amount of money anyway and in terms of house buying, people have lost far more when chains collapse months into conveyancing etc.

If the house is almost built as you say, they may put pressure on to exchange quickly so they may try to get you to go with their recommended solicitor which is fine as long as they are not twice the price of alternatives you can find yourself. 

In terms of your current rental, how long is the notice you need to give? Its unlikely to be exact dates as you don't know how long conveyancing will take but if its a months notice and the completion date of the house is say three months from reservation, you should be able to time it a little. Worst case, you have to pay another months rental where you are, complete on the new house in that time and just pay for the rental for a month and the mortgage on the new place, its not an exact science. 

RandomGuy87

eddddy said:

The normal process for new builds is:

• You pay the reservation fee, then you have 28 days to exchange contracts.
• (That's 28 days for your solicitor to sort out the legal stuff and for you to get a mortgage. Once you exchange contracts, you are legally committed - you can't change your mind [unless you have a longstop date and it passes])

• At some point after exchanging contracts, you will usually be given 10 days notice to complete.
• (The developer might give you an indication in advance of when that date will be. But the date often slips.)

Some people might think that "New Homes Mortgage Helpline" is some kind of organisation (perhaps government backed) with a mission to help home buyers.

Looking at their website, they're not. It looks like they're just a standard mortgage broker business. It seems to be a division of Connells Group - they are primarily a firm of estate agents. Are you buying through a Connells Group estate agent?

Other mortgage brokers might be able to find better deals, or charge you lower fees.


It's also often best to avoid solicitors / conveyancers who are recommended by estate agents or developers.


 

Thanks for the response and information, very helpful.

So in theory, we would be looking at maybe 38 days at most (give or take) to complete and thus own the house and move in?

I think you're right, they look to be a mortgage advisor business which I was aware of. Bellway suggest using them before booking an appointment with them so that you can prove you qualify for a mortgage to help speed up the process but I would expect you can use any. I have already looked at a few lenders as we have a 5% deposit so being a new build, we need to speak to as many lenders as possible.

kingstreet

Are you using HTB as the availability of 95% mortgages on newbuild is small?

RandomGuy87

Noneforit999 said:

We bought a new build via Bellaway, albeit 7 years ago.

Reservation was £500 but from that point you have 28 days to exchange contracts...supposedly. Ours took about 40 ish days but as long as the developer can see its not you holding things up, i.e. being lax on returning paperwork etc then they are not suddenly going to pull out the rug and ditch you as a buyer. If you are 8 weeks in and no exchange, they might start to put the pressure on though.

I would doubt the £250 is negotiable for reservation, its a tiny amount of money anyway and in terms of house buying, people have lost far more when chains collapse months into conveyancing etc.

If the house is almost built as you say, they may put pressure on to exchange quickly so they may try to get you to go with their recommended solicitor which is fine as long as they are not twice the price of alternatives you can find yourself. 

In terms of your current rental, how long is the notice you need to give? Its unlikely to be exact dates as you don't know how long conveyancing will take but if its a months notice and the completion date of the house is say three months from reservation, you should be able to time it a little. Worst case, you have to pay another months rental where you are, complete on the new house in that time and just pay for the rental for a month and the mortgage on the new place, its not an exact science. 

Thanks for the reply and information.

I should have worded the negotiation part better, I don't mind the price as I know it will be coming off the purchase price but wondered if the time frame of 28 days was negotiable to extend it. 

I would definitely be looking for my own solicitor etc to bring total costs down. 

I don't actually need to give any notice as I rent from family but I would like to give them some notice out of respect so that they aren't left with an empty house at short notice. If Bellway thought that I had to give notice, would this help at all or would they not care? 

I'm surprised that it sounds like we could in theory reserve and complete in a relatively quick time scale, I know there is no chain to worry about but I thought the legal bit and mortgage would hold us up for a couple of months at least.

RandomGuy87

kingstreet said:

Are you using HTB as the availability of 95% mortgages on newbuild is small?

No. I've already looked into it and it seems that there are a few who will provide a 95% LTV - Skipton possibly being one.

kingstreet

Skipton being the only reasonable high street name. The rest are all small/local building societies.

RandomGuy87

kingstreet said:

Skipton being the only reasonable high street name. The rest are all small/local building societies.

I can apply online with them if its 90% LTV but it says on their website to ring if it is 955 LTV so hopefully I have a chance.

Failing that, I'll let NHMH do the leg work for me.

eddddy

RandomGuy87 said:

So in theory, we would be looking at maybe 38 days at most (give or take) to complete and thus own the house and move in?

No - that's not correct.

You aim to exchange contract after 28 days.

Then you 'sit and wait' until you hear from the builder that the house is ready. When you eventually hear from the builder, it will be to give you 10 days notice of completion (you can move in on completion day, or any time after that.)


So it might be 2 weeks before you're given your 10 days notice, or it might be 2 months, or it might be 6 months, or it might be a year or more.


(People often ask for a 'long-stop date' in the contract. If the long-stop date is, say, 1st July 2022, it means you can give up and walk away without losing your deposit, if the house isn't ready by 1st July 2022.)

RandomGuy87

eddddy said:

RandomGuy87 said:

So in theory, we would be looking at maybe 38 days at most (give or take) to complete and thus own the house and move in?

No - that's not correct.

You aim to exchange contract after 28 days.

Then you 'sit and wait' until you hear from the builder that the house is ready. When you eventually hear from the builder, it will be to give you 10 days notice of completion (you can move in on completion day, or any time after that.)


So it might be 2 weeks before you're given your 10 days notice, or it might be 2 months, or it might be 6 months, or it might be a year or more.


(People often ask for a 'long-stop date' in the contract. If the long-stop date is, say, 1st July 2022, it means you can give up and walk away without losing your deposit, if the house isn't ready by 1st July 2022.)

Thanks for explaining. It looks like the house is almost complete, there are only a few things inside to finish and they have only released two plots for sale in this area, this house being one. With that in mind, would you expect it to be a case that the builder notice wouldn't take too long?

Our issue is that we want a certain plot, but we don't want it to be ready in a months time, if it was ready in 2 or 3 months time, that would be perfect. I know this seems like an odd thing to want but the house we've seen is the exact plot we want so we don't want to miss out on it.