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    • kgreen94
    • By kgreen94 4th Jan 18, 8:45 PM
    • 1Posts
    • 0Thanks
    kgreen94
    New build homes... the catch
    • #1
    • 4th Jan 18, 8:45 PM
    New build homes... the catch 4th Jan 18 at 8:45 PM
    Hello all,

    Apologies if this has previously been answered but I just want some help! Me and my partner (23) are looking to save for a deposit for our first home together.

    We are looking to save 5% for a new build property and take advantage of the help to buy isa. However, question 1: why are new build homes soooo expensive
    and following on from that we will need a bigger mortgage as we are both on 18-19k each therefore won't be able to afford a mortgage on a new build

    Basically how does it work out as currently i don't think the new build scheme can benefit us?

    Thanks!
Page 1
    • HampshireH
    • By HampshireH 4th Jan 18, 9:23 PM
    • 712 Posts
    • 756 Thanks
    HampshireH
    • #2
    • 4th Jan 18, 9:23 PM
    • #2
    • 4th Jan 18, 9:23 PM
    Why specifically do you want to buy a new build?

    What's wrong with other lived in homes?
    • armchaireconomist
    • By armchaireconomist 4th Jan 18, 9:32 PM
    • 234 Posts
    • 312 Thanks
    armchaireconomist
    • #3
    • 4th Jan 18, 9:32 PM
    • #3
    • 4th Jan 18, 9:32 PM
    1. You can open and use a HTB ISA (see lifetime ISA) on any home, doesn't have to be new build. The 20% government LOAN (note: loan. You have to pay it back) is the only part which applies only to new builds.


    2. Why specifically a new build?
    • brit1234
    • By brit1234 4th Jan 18, 10:20 PM
    • 5,184 Posts
    • 11,958 Thanks
    brit1234
    • #4
    • 4th Jan 18, 10:20 PM
    • #4
    • 4th Jan 18, 10:20 PM
    Modern new builds are small dimensions, overvalued and usally poor quality.

    Better money is with an older and cheaper property. You can always gut it if you want the modern features.
    Scams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
    • goodwithsaving
    • By goodwithsaving 4th Jan 18, 10:25 PM
    • 825 Posts
    • 1,265 Thanks
    goodwithsaving
    • #5
    • 4th Jan 18, 10:25 PM
    • #5
    • 4th Jan 18, 10:25 PM
    My suggestion? Save longer and don't go in with 5%. If you can't afford a mortgage on a new build, then don't buy a new build....
    They are at a premium because they're new, never lived in. I wouldn't buy one myself.
    Every time you borrow money, you’re robbing your future self. –Nathan W. Morris
    • ceb1995
    • By ceb1995 4th Jan 18, 10:36 PM
    • 250 Posts
    • 553 Thanks
    ceb1995
    • #6
    • 4th Jan 18, 10:36 PM
    • #6
    • 4th Jan 18, 10:36 PM
    We couldn't go for a new build as we didn't meet the affordable homes criteria in our area being currently childless (met all the other criteria though).
    It ll need some work doing to it in time but we re in the process of buying a bigger 1970s house than we could have ever bought as a new build and managed to get a 95% ltv mortgage(our household income is 30k including DHs average bonuses). Also buying new makes it unlikely that you could ever add any value to the house whereas there's possibility there when it's been lived in so unless it's your only option to afford a home I wouldn't go for it personally.
    • teddysmum
    • By teddysmum 4th Jan 18, 11:25 PM
    • 9,044 Posts
    • 5,393 Thanks
    teddysmum
    • #7
    • 4th Jan 18, 11:25 PM
    • #7
    • 4th Jan 18, 11:25 PM
    Older houses usually have more garden and a garage big enough to park a car with room to get out. New estates also seem to have parking problems for visitors as road spaces/bays are limited. (One near us has double yellow lines, allowing no road parking at all and each house has a tiny garage, with drive parking for one car.
    • moneyistooshorttomention
    • By moneyistooshorttomention 5th Jan 18, 7:53 AM
    • 15,858 Posts
    • 43,888 Thanks
    moneyistooshorttomention
    • #8
    • 5th Jan 18, 7:53 AM
    • #8
    • 5th Jan 18, 7:53 AM
    I may be being unduly cynical - but I'd got the impression this sort of scheme is actually really for builders benefit (ie they get the benefit of this money by charging more for the house in the first place).

    Feel free to correct me if I'm wrong on that one....
    *******************
    • NineDeuce
    • By NineDeuce 5th Jan 18, 8:48 AM
    • 827 Posts
    • 766 Thanks
    NineDeuce
    • #9
    • 5th Jan 18, 8:48 AM
    • #9
    • 5th Jan 18, 8:48 AM
    Why do people apologise for putting posts that might have been on before?
    • Aylesbury Duck
    • By Aylesbury Duck 5th Jan 18, 8:53 AM
    • 2,003 Posts
    • 2,642 Thanks
    Aylesbury Duck
    I always took the view that with new builds, part of the price is a premium to cover the builder's glossy marketing brochures, placards, showhome reception, etc. As others have said, you often get much better value from an older house.
    • tykesi
    • By tykesi 5th Jan 18, 8:53 AM
    • 1,944 Posts
    • 2,724 Thanks
    tykesi
    However, question 1: why are new build homes soooo expensive
    Originally posted by kgreen94
    Because there are endless gullible people who want shiny new (small, poorly built) houses over something that someone has already lived in (but is built properly on a decent sized plot and much bigger than current equivalent new builds).

    Supply and demand.
    • LandyAndy
    • By LandyAndy 5th Jan 18, 9:03 AM
    • 24,321 Posts
    • 51,377 Thanks
    LandyAndy
    Don't forget, today's shoddy new build is tomorrow's well constructed older house.
    • Katapolt
    • By Katapolt 5th Jan 18, 9:05 AM
    • 216 Posts
    • 276 Thanks
    Katapolt
    Having recently gone through all these options myself, heres what discovered:
    - If you want to use the HTB Equity Loan scheme to MUST be eligible for a mortgage for the full purchase price (minus deposit) of the property, as you will be paying back the mortgage AND the loan every month they wont accept it if you can only get a mortgage for the price -20% equity.

    -theyre overpriced and often rushed, especially on large developments. youll lose value the second you move in.

    -with an income if 18-19k you should be looking in the region of £150,000 max, as its really hard to find a mortgage for more than 4 times your wage. again, this must be the price BEFORE any equity loan.

    i sacked off the idea of a new build and now have a very nice little place that i can put my own stamp on
    • bouicca21
    • By bouicca21 5th Jan 18, 9:41 AM
    • 3,692 Posts
    • 5,550 Thanks
    bouicca21
    I rarely agree with Money, but this time I reckon Money is right on the money.

    I am possibly even more cynical as I'd point out that property development companies like TW contribute large sums to Tory coffers.
    • mailmannz
    • By mailmannz 5th Jan 18, 9:45 AM
    • 290 Posts
    • 176 Thanks
    mailmannz
    Do yourself a favour and stay away from the new build property.

    Save for a bit longer and buy an older house that will most likely be bigger, more solid AND not have endless services charges that only ever go up!!!
    • gycraig
    • By gycraig 5th Jan 18, 10:14 AM
    • 437 Posts
    • 324 Thanks
    gycraig
    From experience Newer New builds tend to be a bit smaller but use the space a LOT better, access is better thought of than it was years ago, selling sofas for a living im yet to have a single issue with a customer getting a sofa into a new build.

    I loved that I could move into my new build and just crack on, it came with all the basics is very energy efficient and shouldn’t need any work for a fairly long time.

    No stupid sticky out bits, cupboards hidden everywhere, two ensuite bathrooms. I personally love my new and much prefer it to the bigger ones I could of got down the road for less money
    • Davesnave
    • By Davesnave 5th Jan 18, 10:20 AM
    • 25,327 Posts
    • 93,102 Thanks
    Davesnave
    Why specifically do you want to buy a new build?

    What's wrong with other lived in homes?
    Originally posted by HampshireH
    Many young people are scared-stiff of DIY and want to avoid doing work on a house at all costs.

    I put it down to Britain's education system that doesn't sufficiently value practical skills, or do much to encourage them in the later years of secondary school.

    Mind you, the woodwork teacher asked me not to return after a year with him at my school, so perhaps I'm biased!
    If you are finding huge gaps between your paragraphs and use Firefox, MSE know about the problem. However, they aren't necessarily doing anything about it yet....
    https://forums.moneysavingexpert.com/showthread.php?t=5844460
    • xsor
    • By xsor 5th Jan 18, 11:04 AM
    • 80 Posts
    • 25 Thanks
    xsor
    The catch.. is literally because it's 'new'.

    You're paying premium to move in somewhere that no one has done so before, no one has !!!!ed or shat in your toilet (apart from builders).

    Is it worth it? Well, it's up to you to decide..

    The H2B equity will help in ways that you borrow less from the lender, which means paying less interest etc.

    So the government will own an x amount of %, of your property. You don't have to pay any fees/interest until the end of the 5th year, which is something like 1.75% of your property value + RPI increase and a further 1% (So something like 2.75%, which can increase to 2.80%) - correct me if wrong.

    Might be okay if you want to sell it after the 5 year, but not sure if property value increase will cover your premium.
    • moneyistooshorttomention
    • By moneyistooshorttomention 5th Jan 18, 11:24 AM
    • 15,858 Posts
    • 43,888 Thanks
    moneyistooshorttomention
    Many young people are scared-stiff of DIY and want to avoid doing work on a house at all costs.

    I put it down to Britain's education system that doesn't sufficiently value practical skills, or do much to encourage them in the later years of secondary school.

    Mind you, the woodwork teacher asked me not to return after a year with him at my school, so perhaps I'm biased!
    Originally posted by Davesnave
    Not just younger people - speaking as mid-60s person that can just about change a light bulb and has come to the conclusion I'd probably be a better decorator myself than any of the ones I've employed on current house (not hard).

    I'd much rather move into a house that I didnt have to lift a finger on and that was already in 21st century style - so I do see the attraction. Even bigger attraction when living in an area where a lot of people agree with me that tradespeople often have a manana attitude.

    Personally - I think probably the ideal option for house-buying is probably a house around 5-10 years old. No new build premium and hopefully someone else has sorted out any building defects ("snagging" as they call it). Hopefully also the first owner hasnt done any bodge DIY in the place altering it. When a house has had several previous owners - there's a good chance at least one of them has bodged and/or neglected the place.

    LOL at the thought the woodwork teacher didnt chuck me out the class Dave - despite the novelty of me being the only girl he had in it....
    Last edited by moneyistooshorttomention; 05-01-2018 at 11:27 AM.
    *******************
    • WeAreGhosts
    • By WeAreGhosts 5th Jan 18, 1:09 PM
    • 2,281 Posts
    • 24,892 Thanks
    WeAreGhosts
    Why do people apologise for putting posts that might have been on before?
    Originally posted by NineDeuce
    Because there's always some smart, cocky eejit who says "why not Google it?" or "use the search"....
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