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varghesejim

Any Economic Sense In Buying A New Build?

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ok, the probable answer is no. But I would like to hear any arguments for buying a new build.


We are a couple with a 2 year old child trying to buy our first home-max budget 350K(should be commutable to London in less than 1h30min).


We should decide whether to buy a new build or a second-hand home. The 20% equity loan provided by the government looks very good on the face. But what I found is, we pay 10-20% up for the premium for buying a new build.Is it typical, or do we really have a chance to buy a new build with a nominal premium above second-hand homes? Is there a builder who actaully provides value for money homes?


One advantage for buying a new home is we just need 5 percent of deposit and we can increase our budget since govt pays 20 percent.


Will the new build holds value better than an old build? If that is the case, we can take the pain for now and move to a better home(hopefully) 5 years later.


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ok, the probable answer is no. But I would like to hear any arguments for buying a new build.

We are a couple with a 2 year old child trying to buy our first home-max budget 350K(should be commutable to London in less than 1h30min).

We should decide whether to buy a new build or a second-hand home. The 20% equity loan provided by the government looks very good on the face. But what I found is, we pay 10-20% up for the premium for buying a new build.Is it typical, or do we really have a chance to buy a new build with a nominal premium above second-hand homes? Is there a builder who actaully provides value for money homes?

One advantage for buying a new home is we just need 5 percent of deposit and we can increase our budget since govt pays 20 percent.

Will the new build holds value better than an old build? If that is the case, we can take the pain for now and move to a better home(hopefully) 5 years later.

You do realise that help to buy on new builds is shared equity housing on an 80/20 basis? Always makes me smile how everyone slates 50/50 shared equity /part rent houses then ogle over herb as the government is loaning you 20% deposit. They are not, they take ownership of 20%?of your house until you pay it back. And the 20% figure is not fixed at time of purchase, only the % ownership is. So if over 20 years your house doubles and you have not paid off the Loan in the first five years the governments stake is now the value of 20% of the doubled price! equaling 40% of the purchase price.

In your case £350k means the gov will own £70k worth and if your house doubles that 20% will be worth £140k that you have to pay back before 25 years or I assume they will force you to downsize to get their 20% back.

Look in Milton Keynes, Aylesbury or Leighton buzzard, in all those you will get a decent 4 bed new build for £300k and all are under 1 1/2 hrs into London by train.

M

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You do realise that help to buy on new builds is shared equity housing on an 80/20 basis? Always makes me smile how everyone slates 50/50 shared equity /part rent houses then ogle over herb as the government is loaning you 20% deposit. They are not, they take ownership of 20%?of your house until you pay it back. And the 20% figure is not fixed at time of purchase, only the % ownership is. So if over 20 years your house doubles and you have not paid off the Loan in the first five years the governments stake is now the value of 20% of the doubled price! equaling 40% of the purchase price.

In your case £350k means the gov will own £70k worth and if your house doubles that 20% will be worth £140k that you have to pay back before 25 years or I assume they will force you to downsize to get their 20% back.

Look in Milton Keynes, Aylesbury or Leighton buzzard, in all those you will get a decent 4 bed new build for £300k and all are under 1 1/2 hrs into London by train.

M

1.5 hrs is a very big commute and remember the cost of your season ticket will be taken into account by your mortgage provider, knocking a large chunk off what they will be prepared to lend you .

Asuming you are looking for a 3 bed and are not hung up on a new build you could get one much closer in.

How about East Croydon 13-15mins into Victoria or London Bridge and nice areas within 10 mins tram ride from the station. Despite recent rises its still relatively good value as the insane price ripple (e.g. Tooting at £800k for a three bed with a loft conversion) has not reached it yet. But the first signs are starting to appear - coffe chains being replaced by independant shops and major building programs under way.

I should declare an interest, I gave up waiting for prices to fall and bought in Croydon last October.

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buy a new build with a nominal premium above second-hand homes

Theres nothing notional about it, you are paying a premium, they will typically hold their value until the last house on the estate sells and the builder moves on, then you will see the true value (typically -20%)

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