Pulling out a house near to exchange

[HappyKite2067]

We are near to exchange of our new build house and I’m now having huge doubts about going ahead with it. I’ve had a bad gut feeling throughout but as it gets closer it’s getting stronger!

Reasons:

1. Estate management fees and people telling me to ‘run away’ as they are life ruining
2. The cost of the mortgage is so much higher than our rent, and I’m genuinely worried we can’t afford it- I’ll only have £200 disposable income after all bills, petrol and food, and other half £500. At the moment, we have around £1500 left over between us.

Reasons why I’ve talked myself into going:

1. I need to move for my new job
2. We’ve been renting for 2 years and have secured an okay fixed deal
3. There’s very little choice in the area we are moving to and new build is probably (even with mgt fees the most cost effective)
4. We are TTC (although how we can afford one I don’t know)
5. We are both going to have pay increases next year and the year after.

Am I being unreasonable to pull out and stay renting, and maybe choose to rent closer to work to have more disposable income and wait for an older new build which needs less work?

You need to really drill into the numbers here- you’re unlikely to get a salary increase if on mat leave and even if you do your pay will be less. If you’re serious as a couple enough to have a baby id combine finances rather than £200 for you, £500 for him- ie £700 left in the family pot for spending. This doesn’t feel a lot for all costs and things would be tight! Is the house too big for your needs is there a smaller plot you could go for?

It's always going to be better to own your own home than face the insecurity and restrictions of renting. £700 disposable income is plenty!

Not with nursery fees.

I don't think the numbers add up. I'd stay put if I were you.

Renting is dead money, everyone knows that, so it all depends on how much you want your own home. Bearing in mind you're more likely to buy before having kids, just because of the expense.

So once baby comes you might find yourself in a position where you will be stuck in a rental property.
Also bear in mind mortgage rates might drop over the next few years, what rate did you fix at for the mortgage and for how long?

I don’t know why you’d continue to pay someone else’s mortgage and secure their future rather than your own?

how much are your management fees ? I think ours are about £700 Pa.

5% for five years!

What are the penalties for pulling out and how much will you lose?? Is it leasehold??

Personally if you can afford to pull out and it's leasehold I would pull out because there's talk of leasehold new builds being disallowed in the near future.

At what point would you think of making the jump to buy? How much disposable income? Also worried out apartment will be increased in rent!

You say you need to move for work, so your current rent is irrelevant. How much is rent in new area? Are there really no other houses or flats for sale at all? Can't you look at something smaller for now, you can always move again if and when a baby is old enough to require more space.

No it’s freehold with fees for maintaining the areas. We would probably lose a couple of £k at this this point.

I would just go for it, chances are mortgage interest rates will go down so you might have a couple of years living tightly (depending on your fixed term) but when that’s up then you might come to find you get a better rate and have more income left each month

Rent is similar if not a bit cheaper in the new area! We could buy smaller but it’s stamp duty and solicitor fees when we know we will need that extra room! It’s also time now to try and find another property before my job starts.

I can only speak to the management fees one , we are freehold but still have a management fee. We were told the fee would be £150 a year but so far it hasn’t been more than £70 (been here 5 years and estate finished 3 years ago), I don’t think the management fee horror stories are as common as you’d think based on the media. However, I do think it’s a risk that you have to accept if you want a new build and personally when we sell our house I probably wouldn’t go for another new build with a management fee just in case.

£150 but they are uncapped so could keep going up!

Wow so that couple of k is yearly forever and likely to rise with inflation?

I'd definitely walk away they get you one way or another these house builders don't they....

What does your partner think?

I can’t be penalized for being on mat leave so I would get the salary increase. I get 6 months full pay (occupation m pay). We are also hopeful for the childcare incentives which will come in in 2025.

No it’s freehold with fees for maintaining the areas.

But how much are those fees? What has your solicitor advised regarding them?

I don’t think that’s too bad tbh. I live in a previous house for 5 years from new and they never increased. id just go for it. You should always buy the biggest house you can when you move as moving costs are so silly. Might feel tight for a couple of years but will even out.

5% is worse case scenario ie today.
We just renewed and agreed to 4.98 over 2 years, as rates are likely to not remain the same as they are now.
Plus £700 disposable income isn't bad at all, you would just cut back and adjust naturally to accommodate your budget. Bear in mind you get child benefit too which is around £100 a month for 1 child now.

I suppose it depends what exactly you're buying. If rent is really that much cheaper I would be inclined to rent a while looking for something more affordable.

Silly me lol 😆 the fees are £150 is that a year? That's not to bad if it's monthly then no definitely not.

I'd see what your partner thinks it's all you can do, has to be a joint decision. But yeah your right they could increase them hugely once you've exchanged and your stuck then if uncapped

£150 and just that they are uncapped, not really any advice!

Ok well £150 a year is nothing. What does your solicitor say about future rises?

Childcare you could possibly claim on UC, plus the free hours you'll be getting so work that out.

House prices won't go down, though if it's brand new with no previous owner you will be paying a bit over the odds.

Letting you know they are uncapped is a warning in itself...