Buying a new build when you own a property

[Caitlin991]

We’ve found the perfect new build, however the estate agents want us to sell and exchange within 6 weeks of reserving the property, despite the property completion date being early 2024.
I assume they expect us to go into rented accommodation, but given the cost of renting currently I don’t think that will be sensible.
has anyone else gone through this? What we’re your options? Did anyone even humour buying your property that far in advance?

They sound desperate. Personally I’d jog on.

Sounds like the build is running out of money

Walk away

My parents are looking at new builds. They have also been told this. But they are moving in with my sister in the interim.

I did a part exchange

Indeed, part exchange. The issue would be that your house would not be that easy to sell, i.e buyers would be out off by quick exchange with no completion, but that is not going to be your problem.

The build has only just started so I can’t imagine money is running out yet - from what I’ve read it’s a pretty standard practice?

In an ideal world we would do something similar, but we have no one who could house us for that long!
I think I’d be less worried about it if the house was to be completed this year, but it’s so far away mortgages would expire etc, I can’t imagine any buyer would agree to it :(.
My guess is they only want first time or cash buyers..

It is completely standard annoyingly. Our first new build we were renting anyway. Our second one, we ended up renting for four months as the build was delayed.
Some neighbours lived with family, some in caravans.

Did the developers give you any other options, such as if the buyer agrees to not moving in until the house is built, then that would be enough?
it’s just crazy being so far in advance! I’m not convinced they’ve even started building the house 🤦🏼‍♀️

Its standard practice but totally impractical for many people

It's fairly standard for new builds.

We reserved a property in Feb, exchanged March, due to be finished end July. If the estate is popular properties will go more quickly so the stuff being finished earlier than next year is already sold.

We put our house on the market in Feb, only just got a buyer - FTB so hopefully they will be ok to complete when we want to move. If we hadn't sold in the next month we would be looking at part ex

It is standard practice but ludicrous. I'm in a new build now as my first home, but would never buy a new build again for this reason.

That wouldn’t necessarily put buyers off. It’s also safer if you’re getting a mortgage, less opportunity for the lender to rescind their mortgage offer between exchange and completion

We sold our flat to a FTB when we reserved our new build. They were happy to wait the 5 months until we completed the sale but appreciate we were very lucky!

Options

• part exchange

-move in with family -rent

Some builders will let you stay in your current home for longer but they are few and far between!!

We agreed to exchange with our buyers and then delay completion for two months. They were happy with that but then the build was delayed a further 4 months so needn't have bothered!

We sold them rented, I was pregnant at the time so no kids to factor in but we ended up moving in the week before I gave birth which wasn’t ideal - or indeed the plan!

Completely normal and was a big surprise to us a couple of years ago when we reserved on our newbuild.

When selling our old house we agreed on a long (5-month) gap between E&C (our buyer was fine with this) and then we moved into my late parents property for the remainder of the time.
Speaking to our new (newbuild) neighbours they all had tales of living with parents, renting etc for a year.

When the sales team first told us we were in disbelief (hadn't moved for 30-years) but then we found it was exactly the same with other developers in the area. In one case they wanted only 4-weeks between res & exch whereas most were 6-weeks.
Worth the effort though, we have been very happy since the move.

I'm selling and then buying a newbuild. I had a very similar conversation yesterday regarding completion before the house is built although it's already being built now and I expect to move in July. I was told it can't complete until the NHBC certificate has been issued.

Well, we were buying part exchange, developer wanted to exchange in 30 days with completion on notice, which meant that we would be held hostage in case of delays. Our solicitor strongly advised agains it. We could be in a situation when our mortgage offer expired and new would be with higher rate, and we’d still be waiting for completion. This house stayed on the market for a while and in the we did buy it but that was when they were able to commit to completion dare.

We spoke to someone else at the EA and they’ve said we need to be sold and in a complete chain before we can even reserve the house.
Seems excessive considering the homes won’t be build until next year.

As already said, had been completely normal for NB properties for some time now, annoying but there it is.
It caused us some thought about what we would do but we worked out a solution because we really wanted the house.

Look at it in a positive way
If you want to order extras (I mean things like extra sockets, lighting, ethernet points, u/floor heating, different kitchen units etc) then you can have them done whereas if the house was nearing completion non of these options would be available.

We’re only planning on moving if we can buy that particular house - it worries me that by the time we sell and are in a chain the house will be reserved already.
I thought we would be able to reserve and then given a time limit to sell which would make it slightly less of a risk, especially this far in advance.
They also want the extras chosen by the end of June - which isn’t likely if we need to sell before we can reserve 🙃

Extras are a whole different ballgame.

Yes, you need to order them early on as many of them (listed above) need to be built in.
The big issue is that you have to pay for them upfront and it is not unknown for people to pay for them and then not get the house (and no refund).
We reserved 12-months before completion and exchanged about 10-weeks later (were getting pushed big time by the developer) but still had time to order (and pay) for our extras.

Was a real eye-opener for us.

That’s what puts me off.
Our current property is a new build and we were still choosing extras a couple of months before completion, I assumed they’d be more lenient with the time frame.
To be honest the way they’re going I think they’ll struggle to sell them all as the price of the houses are probably out of reach for most first time buyers & I can’t imagine that many people would be willing to risk selling and going into rented in the current climate, when there’s over 6 months to completion..