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New Build- £165,000- What To Offer?

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We are both 31 and have finally saved up enough to put a 5% deposit down. We are going to go for the 'help to buy' scheme and go for a new build. Yikes!

But where do we start? We have little to no idea on what to offer etc... I do know that it depends on how popular the development is but how do we know that really... Taylor Wimpey (on their website) would pay for the Stamp Duty.

Any help would be much appreciated, many thanks!

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Apply for mortgage, exxagerate earnings, offer the max you can blag from the bank, on the minimum share available. Isn't that how these things normally work?

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We are both 31 and have finally saved up enough to put a 5% deposit down. We are going to go for the 'help to buy' scheme and go for a new build. Yikes!

But where do we start? We have little to no idea on what to offer etc... I do know that it depends on how popular the development is but how do we know that really... Taylor Wimpey (on their website) would pay for the Stamp Duty.

Any help would be much appreciated, many thanks!

Do you mind me asking what you are going to get for 165,000

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Strange answers so far!! 4 bed townhouse in a not so desirable postcode ooop north!

Strange?

You may as well have posted on a vegan Web forum asking about the best way to cook a steak.

You're lucky no one has said you could afford a couple of one way tickets Switzerland.

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Strange answers so far!! 4 bed townhouse in a not so desirable postcode ooop north!

If you work nearby and there's parking, reasonable garden, no housing association next door and you don;t plan on moving for 10 years (resale value) then it might be worth going for.

When we were viewing houses There were quite a few good value 2005+ new builds for sale which the owners had ploughed money into and were selling below what they had paid.

Unless your dependent on the help-to-buy or builders deal, second hand 'new build' may well offer better value.

Newer houses offer much better fuel efficiency than older houses (especially pre 70's).

Beware of new builds with electric heating because it's expensive and you may want to rip it out. If there is no mains gas and no rear access then you won;t be able to have oil heating and will be stuck with the electric heating. You are unlikely to ever be able to sell it again. Lots of new builds fall into this category.

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If you work nearby and there's parking, reasonable garden, no housing association next door and you don;t plan on moving for 10 years (resale value) then it might be worth going for.

When we were viewing houses There were quite a few good value 2005+ new builds for sale which the owners had ploughed money into and were selling below what they had paid.

Unless your dependent on the help-to-buy or builders deal, second hand 'new build' may well offer better value.

Newer houses offer much better fuel efficiency than older houses (especially pre 70's).

Beware of new builds with electric heating because it's expensive and you may want to rip it out. If there is no mains gas and no rear access then you won;t be able to have oil heating and will be stuck with the electric heating. You are unlikely to ever be able to sell it again. Lots of new builds fall into this category.

Thanks for this. We do plan on selling on after 5-6 years. There is a council area close by, but we have discovered that almost all new builds suffer from this. Work about half an hour away too.

It's such good value that it is hard to ignore!

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Thanks for this. We do plan on selling on after 5-6 years. There is a council area close by, but we have discovered that almost all new builds suffer from this. Work about half an hour away too.

It's such good value that it is hard to ignore!

If you don;t mind me asking, why are you thinking of moving again in 5/6 years?

What's wrong with it? Location or Size?

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My partner would like to move to the US. We have a realistic chance of this happening but we've been renting for years now and just seem to stupidly be throwing money when we could start actually buying something.

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Just imagine that it starts dropping by 10% a year

start £165,000 Loss/yr

Year 1 £148,500 £16,500

Year 2 £133,650 £14,850

Year 3 £120,285 £13,365

Year 4 £108,257 £12,029

Year 5 £97,431 £10,826

If your current rent is higher than that then you cant lose unless prices fall more then 10% pa

you also need to consider moving/legal fees.

Edited by oligotroph

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My partner would like to move to the US. We have a realistic chance of this happening but we've been renting for years now and just seem to stupidly be throwing money when we could start actually buying something.

Depends on what sort of yield you are renting at. If the rent is cheap enough and you are saving then there is little point in buying for only 5 years. Remember that buying is a hedge on your rent going up, although at current IRs there seems to be more change that mortgage payments could go up faster than rent!

If you are not happy with your LL and the rent is too high, plus there is nowhere cheaper to rent, then buying a place may not be such a bad idea. Better to buy one 2nd hand though!

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If you work nearby and there's parking, reasonable garden, no housing association next door and you don;t plan on moving for 10 years (resale value) then it might be worth going for.

When we were viewing houses There were quite a few good value 2005+ new builds for sale which the owners had ploughed money into and were selling below what they had paid.

Unless your dependent on the help-to-buy or builders deal, second hand 'new build' may well offer better value.

Newer houses offer much better fuel efficiency than older houses (especially pre 70's).

Beware of new builds with electric heating because it's expensive and you may want to rip it out. If there is no mains gas and no rear access then you won;t be able to have oil heating and will be stuck with the electric heating. You are unlikely to ever be able to sell it again. Lots of new builds fall into this category.

Good advice. I wasn't even aware that so many new builds didn't have gas connections.

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We are currently paying £774 PCM rent. Surely property is not going to go downhill quite at this rate!!

Not the information I was looking for. How much would you guess the place you are renting is worth?(i.e. if you were to buy it, based on what is selling on your street). Would you be buying in a worst area? If so, how much are rents in this worst area?

Surely property is not going to go downhill quite at this rate!!

I have no idea what the property will do over the next few year but I know that if I can rent at a 2% yield there is almost no point in ever buying the place!

Edited by renting til I die

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I would offer lower than the asking.....you may get lucky if they're not selling very well. I got a good discount when I bought in late 2008 when prices were dropping (but I also had to sell my previous place at a reduced price :( ). If they're not keen on dropping the price negotiate on "extras" eg floor coverings/fitted wardrobes/turfing the garden etc as they can get all these quite cheaply and will undoubtedly cost you more.

When you come to sell you may find you get less than you paid (even if house prices generally haven't moved much) as you pay a "developer's premium" for a new-build. On the plus side there is usually no maintenace to speak of and the builder should attend to any "snagging" issues as part of the deal.

All in all I'm glad I bought a new-build as I can't do DIY so it's peaceof mind. (I've also lived in period "money pits" which had all the "features" you could want but unless you are good at DIY are not all they're cracked up to be.)

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look to see what similar "used" properties have been going for around a mile radius from the address in 2008-2011 then offer 5% less , won`t go too wrong

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Not the information I was looking for. How much would you guess the place you are renting is worth?(i.e. if you were to buy it, based on what is selling on your street). Would you be buying in a worst area? If so, how much are rents in this worst area?

I have no idea what the property will do over the next few year but I know that if I can rent at a 2% yield there is almost no point in ever buying the place!

The place I'm renting is worth roughly £150,000 in the middle of Leeds City Centre. Worst area? Don't know about that as city centre aren't amazing places to live. To me yes, it would be better as it's away from the centre however the new property is situated near a council area. As most if not all the new builds I've seen.

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the new £165,000 house you are thinking about buying would rent out at £600 pcm based on a 4% yield and £50pcm other expenses (letting agent fees, voids and insurance) or more realistically £650 per month.

If you have a large deposit earning nothing, then it might be worth buying as you will find it hard to earn the difference between rent and saving rates.

If you are looking to borrow £150,000, then the best rate you will get on a 5 year deal including fees is 4.8%. The interest rate on that mortgage is £600pcm which by the time you added maintenance and buildings insurance is no saving over renting HOWEVER if you can overpay the mortgage by 300/400 per month you will save quite a bit over the 5 years.

Don't forget stamp duty £1500, conveyancing fees £500, searches etc. £500 spread over 5 years = an extra £500/yr or £30 per month expense when buying.

Don't forget renting you will have letting agent fees and other expenses.

IMO theres not a lot in it assuming prices stay static and you don't make overpayments, but then that's the way a market (even a rigged one) works.

Edited by Wurzel Of Highbridge

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Yeah renting is dead money right

So is buying shoes! Or, buying food, I'm sure you eat far too much! Think of all that dead money you are stuffing into your mouth! :P

Ok Sony. Wurzel beat me to it and I agree that with the numbers you a talking about, there isn't really that much it. You are renting at a gross yield of 6.19% which I think could be a bit high. Can you cut the cost of renting down by moving to a cheaper area? Then as Wurzel points out, renting would no doubt work out far cheaper. At current IR I can see your attraction to buying but remember to account for all the additional costs before you jump into it. Think about possible higher IR and if you would still be better off. Don't bank on higher house prices in 5 years, its not that long a time frame. If you really like the idea of buying and you think you will enjoy having a house and all the cr*p that goes along with it, even if it costs you more in the long term. Then do it! I don't post on HPC if I want to go down the pub and spend some dead money on a pint! :P

P.s. All cash that is spend and doesn't generate a return is dead money. The interest on your mortgage = Dead money. Home repair costs = Dead money. The new wall paper for the living room = Dead money! Yes, rent is dead money too but I get to live somewhere that I can't afford to buy!

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