Reserving new build without AIP

[starynight21]

Hello,

I don’t normally post on here so please be kind.

My husband & I are wanting to buy our first home soon. We prefer new builds and have been looking at different developers here in Scotland.

We saw this amazing house but the development only have a handful of plots left and we won’t be ready to get an AIP until September.

Our financial advisor/mortgage broker has looked at our credit files and says we should be okay to get a mortgage but we just need to wait until September to pay off some small credit cards.

The developments sales agent has been trying to get us to pay £500 to reserve the plots and says she doesn’t need to see a AIP and the house won’t be completed until next summer and by that time we will have everything together.

I was considering just taking the gamble as it’s the last plot remaining but, I feel that’s a bit irresponsible also.

The house is £195k and our estimated budget of what we would get is around £270k.

The sales agent said we would need a lawyer but nothing would be paid for until next year also. That as well sounds strange to me?

Can anyone advise on this please.

You need to be clear exactly what you are agreeing to. If it’s just £500 but you can pull out and only lose the £500 then that’s fine. But if they expect you to conclude missives (the formal contract that says they will sell it to you and you will buy it from them on a given date - with new builds the date can be specified as x days after they notify you it’s ready) then you need to know you can in fact complete otherwise you could face a substantial penalty. Basically read carefully anything they want you to sign and if in doubt seek legal advice.

Is there a reason you can't get an AIP before September? I can't imagine a small amount of debt would make much difference. I've never bought a new build, but in my experience with people who have (our vendors bought a new build, as have friends), exchange of contracts had to be within 6 weeks of reserving the plot, even though they didn't complete and move in for another 9 months. So it's just what the PP said about making sure you aren't committing yourself to something when you can't guarantee that you'll be able to afford it.

If the builder is allowing you to put your £500 on a plot without the AIP I would snap it up. I'm also in Scotland the developers around here won't let you even look at the showhomes without a AIP, one big developer even makes you meet with their financial advisers to prove you can afford it before letting you on their waiting list for a plot. If you have a house to sell you can forget it! Snap it up.

Hi all thanks for your comments and advice.

The developer said that the reservation form says the missives are done in one month but that this never happens and won’t be until the week we move in.

I was originally looking at Taylor Wimpey but after seeing this development it’s hard to look back.

We can’t apply for an AIP until I say atleast July according to our financial advisor.

The worry is that we reserve and then they do want the missives completed in one month even though she’s saying to me this won’t be the case.

Has anyone heard of this before?

@Gingersay thanks, Taylor Wimpey are like that with the waiting list and needing an AIP.