Q:Hi,
I've paid a booking fee (not deposit & no contract signed) on a new build. Current house has been on the market for 6 months with no bids/offers. I have good equity in current house. How can I keep the new build without putting myself in financial trouble pguyr to selling current house. I've thought about renting or a bridging loan but both options worry me for different reasons.
Any advice would be greatly appreciated.
Meeker1972
Six months without a single offer is not normal. Have you had many viewings? There is either something wrong with the house or the price is too high. Or something wrong with the agent. Simple as that.
I believe you'd be making a big mistake taking a bridging loan in the hope that someone will suddenly come and pay the asking price on your house. Six months says this won't happen. If anything, buyer confidence is lower than six months ago, thanks to interest rates and Northern Rock and we're also coming up to Christmas.
I share Squatnow's skepticism regarding new builds. Is it really worth it?
Most of the newbuilds that I see (in England) are on tiny, substandard plots and look quite unattractive. They are often full of minor defects which you'll be chasing the builder about for months to come, if he's still in business. Basically, as long as its habitable, a house is "sold as seen" regardless of any guarantees.
You will always pay a premium with a new build to cover the builder's profit, marketing costs etc., and simply because there are less brand new houses than than there are potential purchasers of them. This is important to note, because a year later it won't be "new" and you'll be lucky if the value has risen at all compared to everything else. If you're unlucky, it will have fallen.
That said, if you genuinely love the house, are aware of all the above, and aren't merely being pushed in to this by an increasingly desperate builder, then go ahead.
But doing anything other than selling your house first is nuts! Maybe if the builder had more confidence in the housing market, he wouldn't be putting pressure on you to buy.
Good luck whatever you do.
Price levels are unsustainable compared to incomes to an extent far higher than much of the UK mainland. Those buy-to-letters are probably culpable as usual.
What's going to happen when their equity vanishes and they can't get tenants either. Recipe for disaster.
Perish the thought, but what happens if the idiots fall out again and we have a bout of terrorism….
None of us can predict the future but I would suggest that the number of storm clouds in the sky should serve as a salutory warning against speculation. Buying a second property, taking out a bridging loan or putting down a deposit on a house (when you havn't sold your current one) are all forms of speculation.
also you can't really say you've got a decent amount of equity until you've actually sold it.
on paper you may have but the fact you haven't sold for 6 months means it's priced too high therefore reducing your equity straight away!
Walk away……DON'T get a bridging loan!
New builds are TANKING. Anyone buying one without MASSIVE discounts needs a lobotomy.