Will I get a £600k house for £500k

[caravantulips]

Suddenly find myself looking for a house for the first time. (Long story but I’ve never looked or bought before). There’s a new build advertised as £595 guide price. Am I totally naive in thinking that the price could be brought down if they do don’t all the finishing hi spec bits. Plus slow market at the moment (I have no idea - is it slow? Just thought might be with the news etc.). £500k is my absolute max budget. Am I wasting time even thinking it’s an option?

Our house was listed at £650. We got it down to £600 and they paid our stamp duty and they part exed our old place for £30k more than they ended up selling it for.

The people trying to buy it before us pulled out at the last minute. With it being a more expensive house, they had trouble finding a new buyer and so it sat on the market for half a year. If developers are desperate, they do have an awful lot of flexibility.

The person who was going to buy it also upgraded on a lot of the options, which we got included too, obviously.

It happens, but you have to get lucky.

First Homes scheme: first-time buyer's guide: How the scheme works - GOV.UK https://share.google/0nsxqQyBSiOp0eiCB

Is it 500 limit or 420?
Ask if they have a cheaper property which fits the scheme

Yes, I’ve worked in the industry for a long time and it’s pretty bleak at the moment. But for the ones that remain it’s still worth trying to negotiate.

I worked in resi property development for a long time and for various boring accounting reasons they won’t be as desperate as you think. There are many negative implications for selling at a vastly reduced price, none of which apply if the property simply remains on sale unsold.

I'm in the building trade OP, give the new build a swerve, no point in spending £600K on something built around a flimsy wood, chipboard and dry lined frame worth £5.99

Get a decent, solid tidy house built anywhere between the late 20's and late 70's, when solid walls were standard, floors were made of actual wood and joists were somewhat bigger than the kindling we use now.

Thanks. I did often wonder. Good to know!

Fair enough.

Apologies. I saw your initial comment and last comment but didn't read the middle of your post properly. I agree that 100k reduction is unlikely but it's not impossible.

Good to know. Actually, I've seen some v high end ones (over a million) reduce by around £250k before they sold. That was in Sandbanks, Poole, last year or the year before.

Depends if the whole development is complete and they want to pull the sales team out or whether they are still building

Would you ever cop on.

@Teaandwater Tell me you are Irish without telling me you are Irish 😁

No worries, i’m always skim reading on here too. I’ve read a lot about new builds recently as i’m buying one but sadly mine isn’t reduced as it’s right at the start of the build. I hope I don’t get too sad when my new neighbours at the end of the build start telling me how much they got discounted or freebies thrown in! Still, I got a good plot as think I was first to proceed as no property to sell. Exciting times, after renting forever.

Good luck with your new purchase @Zanatdy

Thank you

Sounds like you are in a similar area and position to me OP. I had same budget and limited options on areas because of schools and job etc. A 3 bed tiny terrace town house new build is 600. I ended up with a 25 year old very similar property for 520. Was bigger and a nicer estate and better location than the new build equivalent. Also tired bathroom and kitchen and decor.
Just to give an idea of the premium a new build attracts. That was a couple of years ago and could possibly get this place for 500 now as neighbours have been on at 525 for months now.
No harm in telling developers you’re interested in anything at 500 in case there’s one that’s less appealing- smallest garden or north facing or less desirable in some way.
I also prefer an old house but do appreciate the clean walls and ceilings and modern electricals and plumbing in this one.

This is not the house for you @caravantulips

Highly unlikely you would be able to reach agreement on price. There would be more space for negotiation on an older house depending on the vendor's situation and level of desperation, but even so - a 95k reduction on a 595k is very unlikely. Plus you don't even like new builds.

If your top budget is 500k, I wouldn't be looking at houses beyond 550k. To look any higher is just to invite disappointment. If a house is listed at 575k or 600k and doesn't sell because it has been valued too high, it will eventually reduce to 550k ... and that's the point at which it could be worth booking a viewing.

The housing market is stagnant in most areas but not all areas. I agree with a PP that if you have half a million you are putting into a house, it would benefit you to do a lot more research into the housing market in your area. The situation is different in different parts of the country so you may get generic replies that do not reflect the situation where you live. And in all areas, the most desirable properties sell quicker and hold their value better. There is a higher demand for houses in good school catchment areas, for example, or houses near good transport links but on quiet roads.

Not a cat's chance in hell

Buy within your means

60% + drop in new-build sales says otherwise. This article is a few months old but if you remove "Improving mortgage conditions" from the first paragraph it would be up to date. What are they going to do with all the empty houses?

https://www.propertyreporter.co.uk/new-build-sales-fall-62-as-mortgage-market-changes-improve-access-for-buyers.html

Empty houses are stock on the balance sheet. You don’t declare profit or loss until they’re sold. Therefore if you are going to make a loss there are many reasons it could be better to keep them unsold

You still have to eventually declare a loss, withholding financial reports is a sure fire sign of a company in trouble.

Empty houses are actually a large flag that says "FALLING MARKET" that becomes a vicious circle where even less stock gets sold, much better to risk pissing off the earlier buyers by undercutting their price by a 100k or so than telegraphing loud and clear that we have a falling market. Of course it is too late now, we have a falling market and the developers that will not be flexible on price (and even some that are being) will go bust.

That’s not what l meant. It’s not related to the companies financial statements or when they submit them.

The property (say new build estate X) is stock on the balance sheet into its sold. If it’s sold at a loss it is transferred as loss to the P&L. If it’s a profit, it’s transferred as profit. This is proper accounting treatment and within reason it’s fine to keep your un sold estate X as stock for as long as it takes to get a favourable accounting outcome, or to reduce the impact of the negative outcome.
You don’t have to shift it. It can be stock (unsold) for say 2 years if the numbers stack up

now of course, if your company is tiny and estate X represents 20% of it, then you may have issues with tying up funding and cash which bring different challenges, but that’s not a bellway/ barratt/ redrow problem.

it might seem logical to you that it works like this, but it doesn’t in reality

Still, headlines that say sales are down 60% on top of all the other negative stuff about new-builds don"t do them any favours. Imagine you were in the bread baking business and sales of bread were down 60%, you wouldn"t tell yourself that your sector was in good shape just because you could stick unsold stock in the freezer for a while?