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INFINITY

New Member..advice On A Newbuild Offer Please.

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Hi everyone, I need some advice please. Ive just sold my house because it is far too small for us, as a result I now need to rehouse my family pretty quickly.

I have been looking at renting but prices for 3 bed homes in Langley, Berks seem to be around the 850-1200 mark. After seeing over 20 properties, I stopped off at a new build office in a cachment area and asked about 3bed homes, they have no showhome built yet and the site is still mainly rubble however, some of the initial houses are nearly built. I put in a really low offers of 240, 250,and 260k on a 330k home, most were instantly rejected but after much haggling they put a figure of 270/275k on the table.. Now I know that house prices look extremely top heavy and I am worried about buying any property at its max sale price, but we really need a place to live in for at least 7-10 years. It seems that most home sellers in this area are pushing for maximum prices and I dont want to get stuck at the very top.

So what do you all think of this particular offer, homes across the road are on avg 340k so i am tempted...I would appreciate any serious replies.

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I bought a new build at end of 2001 and sold beginning of this year - I made F ALL money on it (actually I made a very very small percentage). New Builds do tend to sell for a premium, so even with a discount you may still end up in negative equity. Like the poster above said, it depends on your deposit. If you have a sizable one you should be ok.

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I bought a new build at end of 2001 and sold beginning of this year - I made F ALL money on it (actually I made a very very small percentage). New Builds do tend to sell for a premium, so even with a discount you may still end up in negative equity. Like the poster above said, it depends on your deposit. If you have a sizable one you should be ok.

You are taking a risk if its not built yet. If they accept £270 before they've started they may decide that they will sell the rest at £270, £240 (if the market turns pearshaped) or worst case in bulk to a housing association.

Edited by eek

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When you say, I need somewhere to house my family, I assume you've got kids. Will the three-bed you buy do you for the next ten years? If so, I'd say go ahead. But if you think your family might expand beyond the limits of the house, rent and see what the market does. Because you could end up stuck for space and in neg eq.

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Thanks for taking the time to help out,

Whoops_apocalypse...What do you personally think of the London road area next to Langley Grammar?

Do you believe that house prices will go to infinity and beyond btw?

Definitely not, before we realised that we had a second child on the way my mind had been made up that we would stay put or rent until the bottom of the cycle had been established. The house I live in is a starter home for couples and therefore very small, we desperately need some space.

I have around 50k as deposit at the moment, zero debts.

I dont anticipate having more than 2 kids but who knows. The properties are 3bed town houses and seem to be large enough to afford flexibility as my family grows.

As far as the housing market goes I agree with all of your comments however, I have a genuine purpose to buy and not to invest right at this moment in time so I am almost under pressure to get my family housed before the sale of our place is completed.

I had a look around the area and realised that renting would cost me the same as a mortgage so I decided to try for big discounts on a new build rather than pay top whack prices on older properties which would need renovation, the 3 bed semis across the road are in the region of 300-340k (saw an old one for 340k but needed at least 25-30k renovation work) so 270k looks good on paper (not including the 50k deposit), therefore mortgage of around 220k.

Eek, agree with your thinking, the only hope that I have is that that the property will not get hit too hard, it is being built on land next door to a top Grammar school but that is no gurantee in itself, just a potential net to break the fall should there be one.

Any further thoughts?

Edited by INFINITY

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OK Here's the monthly sums.

£50K savings - say 3.75% net after tax - Approx £150 per month.

Net rental cost (at mid price of £1000PM = £850 Per Month.

You say that there are 3 beds at £270K?

Net mortgage with £50K deposit is £220K. Interest only at 5.5% say is £1000 per month.

OK so only marginally cheaper to rent, but still cheaper and you may be able to negotiate another £100 of the rental too.

Need to look carefully at new developments, at the moment people seem to be willing to pay large sums of mopney for VERY cramped developments with naff all gardens and parking - dinky garage sizes, all sorts of tricks and bedrooms 2/3/4 that are little more than cupboards. Such developments can be very badly hit compared to other property in a downturn - hence the diffrence in price with other older style property - in a lot of cases you are getting a lot more for the money.

Localtion next to a good school a definite benefit.

Try and get a look around another site by the same builder, get the plans for the current sute and see how it compares with garden/frontage areas. You may even find a similar/same style property being built which you can have a look over at various stages of build or maybe even a showhouse. Some new developments are not good, need to make sure the quality is OK.

Sometimes when sites start up initial sales are slow, developers like to have some sales pushed through early to get the jiuces flowing, maybe more negotiating room than usual if this first marketing push isn't that successful and they are part way through a new site and sales pre-sales are flagging - mind you that may not bode well for prices later along the line.

Edited by OnlyMe

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OnlyMe,

You are right about the build quality of many newbuilds, managed to view one that was not the showhome, appaling workmanship. The one that I have put an offer in for is being made by Laing Home who have a good reputation from what I hear.

Also got a quote of 4.79% for 5yr fixed, I know there will be a correction/crash but i need to buy and soften the blow at the same time..very tricky!!

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OnlyMe,

You are right about the build quality of many newbuilds, managed to view one that was not the showhome, appaling workmanship. The one that I have put an offer in for is being made by Laing Home who have a good reputation from what I hear.

Also got a quote of 4.79% for 5yr fixed, I know there will be a correction/crash but i need to buy and soften the blow at the same time..very tricky!!

If you want a loan like that make it a condition of sale that you will be able to move in prior to the that offer finishing. My feeling is that rates are going to go up and you don't want to be in a situation where the lowest fixed rate you can get is not 4.8% but 6.3% because they took 2 months longer to build it.

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Eek,

I need to make a decision asap on the house, so far it looks like we are going to go for it, as long as we get a good deal on the mortgage, they also quoted me for a 10yr at 5.09% fixed. I may stick my neck out and go for the latter. Still very unsure though.

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I would never buy off plot either.

One of the first rules of business (and life) is never pay up-front for something as it removes the incentive to deliver on time/to standard ordered, and removes entirely your power to complain (should you have a complaint).

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You are taking a risk if its not built yet. If they accept £270 before they've started they may decide that they will sell the rest at £270, £240 (if the market turns pearshaped) or worst case in bulk to a housing association.

Or HA buys a few "mixed" among OOs. Justifiied in the interest of "social integration".

I was told, by a brickie friend, of a development near where I used to live where the HA stuff was going to be built last so as not to "deter" sales to OOs. Only anecdotal.

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London Road vacinity is certainly good for schools, etc. hence the price of property and rents...

Traffic can be bit of a nightmare as I'm sure you're well aware.

Is your first child of school age? If not, may be you should consider renting in a decent part of Cippenham for a while. If you're looking to spend £800 pm on rent then I would look at stuff that's advertised at up to £1100 pm and put in offers.

I'm sure that if you're willing to shop around, you'll get something fairly decent for around £800pm.

If you're gonna buy, then I wish you and your family all the best btw, though I think you'd be making a mistake at this stage...

Little one is in nursery in Langley at the moment. Cippeneham is fine, we viewed a few rentals there but that avenue needs more work. May have to get the property paper on Wednesday and take another look.

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Sometimes when sites start up initial sales are slow, developers like to have some sales pushed through early to get the jiuces flowing, maybe more negotiating room than usual if this first marketing push isn't that successful and they are part way through a new site and sales pre-sales are flagging - mind you that may not bode well for prices later along the line.

The company are trying to hit a target before Christmas, not sure how many are sold but the sales staff think that demand will pick up when the showhome is open.

I need to lie down soon!

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Little one is in nursery in Langley at the moment. Cippeneham is fine, we viewed a few rentals there but that avenue needs more work. May have to get the property paper on Wednesday and take another look.

Timing wise what does this mean. Is the child starting school in Sept 2006 such that renting for say 18m is not an option ? Why the rush to actually buy now rather than rent now. ?

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"they put a figure of 270/275k on the table"

You havent told us enough yet.

+ What is the price per square foot?

+ How does that compare with secondhand properties in the same area?

+ What could you rent it for? How does that compare with the cost of an interst only loan at 100%?

You should always ask these questions whne you are considering to buy

-I will find out the full sp on price/sq ft.(Its a townhouse)

-I have checked with secondhand prices and they seem to be in the 300k-340k region.

-Rent? Should be above 1100.00

-Interest only loan (50k deposit) 5yr 4.79% fixed works out to around 840.00/m (10yr 5.09 is 930.00)

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INFINITY,

I need to lie down soon!

You need to be bolt upright and considering every possible angle, this si possibly the biggest financial deicsion of your life buying up in the current market.

See DrB's post the square footage info and comparison with open market values should definitely be looked at.

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Timing wise what does this mean. Is the child starting school in Sept 2006 such that renting for say 18m is not an option ? Why the rush to actually buy now rather than rent now. ?

I just wanted to know what others have done in my situation. My 3yrs old is already in nusery so there is no worry on that part, the rush is purely down to trying to find a good rental, the wife is due any day now. She really wants her own place but I want to rent, so im trying to compromise and negotiate as low as possible on this newbuild, just to see what I can get from them, otherwise we will all be stuck at my parents for a while.

We seem to be focusing more on this than renting because of its prime location and potential 'discount' opportunity before Christmas.

I would like to buy eventually but if I can haggle to a point where I can see a big enough 'buffer zone', say 25%, then I will sign up. At the end of the day, I know prices will fall, so if I can push it to a point where I can factor in some discount i wonder if I will get away with a small correction.

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Guest wrongmove

Eek,

I need to make a decision asap on the house, so far it looks like we are going to go for it, as long as we get a good deal on the mortgage, they also quoted me for a 10yr at 5.09% fixed. I may stick my neck out and go for the latter. Still very unsure though.

INFINITY, if you do decide to go ahead, Newcastle BS do a 10-year fix at 4.75%, much cheaper that the Nationwide.

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'wrongmove', Thanks for that.

I will be viewing a houses 'to rent' tomorrow, may still be able to find a decent one before we get any feedback from the newbuild developer.

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Guest wrongmove

'wrongmove', Thanks for that.

I will be viewing a houses 'to rent' tomorrow, may still be able to find a decent one before we get any feedback from the newbuild developer.

Well good luck in whatever you decide. If you do buy, you might as well get a good rate !

I am personally somewhat bearish on house prices, and happily renting. But you have a good deposit and your personal circumstances are very different to mine.

Just let us all know how it pans out :)

(Edited to add: do check the small print at NBS - their redemption penatlies are a bit high, for example...)

Edited by wrongmove

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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