New build questions

[teaandbiscuitsforme]

We have put an early bird reservation on a new build plot which is due to be released for sale in Jan 2018 with completion being end of the year or beginning of 2019. Having never bought a new build before, this seems a long way away!

We've been allowed to make the early reservation because we are 'proceedable' - we have a cash deposit. The developers have said that once the reservation in January is accepted, we will have 28 days to exchange and pay the deposit.

I now understand this is normal with new builds but what are you supposed to do with no completion date and potentially a year to wait? Are we supposed to sell our house? How do we deal with the mortgage? Should we sell ours, go into rental and sort out the mortgage closer to completion? (We are in a fixed term at the moment so that would cost)

I don't understand how you're supposed to work to their 28 day timetable and pay a huge amount of money for the potential of a piece of earth that has had nothing done to it. I'm so confused!

I would seek legal advice. It seems dodgy that they want you to exchange without committing to a completion date. Also, whoever I know that bought a new-built, paid a reservation fee and only exchanged when the place was built and could actually be purchased.

Thanks. It's with one of the big house builders and they just seem to be saying this is how it is, take it or leave it. They've got plenty of others who want to buy them!

I've heard of this in London before. You just need to pay the deposit. Don't need to sell your current house. I guess the risks is (other than losing your deposit) that if the housing market crashes by 2019 you are legally bound to pay the higher price..,

This happened with us. We held an early bird offer and then when it was released we had to pay a sizeable deposit. We didn't pay - partly because we were remortgaging another property, but also we didn't want to hand over a sizeable amount of cash until it was near being finished. It was a fraught few months as the house builder put us under pressure to pay, threatened to sell the house to the numerous 'other' buyers out there. We held firm and paid maybe a month before completion. From talking to neighbours though everyone else just coughed when asked.

I'm tempted to say we'll pay the deposit once there are at least foundations and ground floor walls. It's £500k so 10% is a huge chunk of money to hand over!! But I'm not sure they'll even be starting on ours until the summer so would they wait for us or go with somebody who will just hand it over?

It is phase 3 of the build so it's well established. Not sure that actually gives you any reassurance because it could all still go tits up! Not London but the property market is doing very well where we are, hence having to look at new builds because the market is so fierce nothing is hanging around!

It does seem to be a very long time from starting until completion. I think I would be tempted to say you need to see the foundations in and brickwork started as you say.

Ours was 10% of about 450k so like you a huge chunk of money.

This is the disadvantage of taking an early bird reservation. Neighbours who came along and bought when houses were already complete I believe were in a stronger position. They didn't get to choose their fixtures and fittings though.

Are they paying your stamp duty? We got ours paid. They wouldn't reduce the sales price but paid our stamp.