New house premiums

[PhillT]

Howdy. I'm hoping some of you might have some thoughts on my position. I'm looking, with my wife, to buy a flat in Sussex. We're first time buyers and have been looking at a new build place that we really like, and can just about afford. However, I've been reading about the dangers of buying a new place because of the premium placed upon them, particularly in the wake of the Help to Buy scheme, which we're planning on taking advantage of.

I'm fairly recently self-employed and as such no mortgage companies will even look at me for a couple of years. So the plan is to buy somewhere now using only our deposit and a mortgage on my wife's salary, and then remortgage and hopefully upgrade in a couple of years when I have accounts to show.

I've read however that because of the premium on new builds, if you plan to move out after only a couple of years it can mean that you end up making very little if anything on a property, and can sometimes even lose money.

This danger seems to vary depending on the location. Building will continue around us in the neighbourhood for another couple of years, until around the time we'd be looking to move out/up, and the plans for the site include two more blocks of identical flats. The developer said these will go on sale for more than the current ones but, well, they would say that, right? We worry therefore that why would people buy a used apartment when there are new ones available. The building we're looking at is the first such block in the immediate area, so it's hard to compare price rise patterns to similar properties nearby.

So, am I worrying too much about this? At the end of the day we can afford this place, and we like it. If we do want to move after a couple of years, should we really worry that we might lose a bit? After all, the monthly mortgage repayments will be far less than we pay for rent at the moment.

Alternatively, are new builds a minefield best avoided?

Any thoughts or advice from someone that knows a bit about this kind of thing would be much appreciated.

[PhillT]

Condi said:

Not sure why people do pay a premium for new builds myself. Buying used you get more space and character at the same money or less.

Buy what you like and what you can afford, remember you're buying it to live in, not to make money from the outset.

We looked at new builds because of the Help to Buy loan, which is only available on new builds, so we could get somewhere a bit bigger and nicer.

You're probably right that we should just buy to get somewhere we like, but after heading some way down that road now we're trying to second guess all sorts of possible eventualities.

[PhillT]

Thanks chaps, lots to mull there.