Advice needed on buying a new build flat in East London

[d907]

Hi
I currently looking at buying a 2 bedroom flat in east London in a new build (less than 3 years old) That is listed at £405,000. The estate agent who showed me round said that I could offer £385,000 and it would probably be accepted. I did some research into the building and discovered that since 2008 it has been owned by the Royal Bank of Scotland and that despite the estate agent putting on a show in the office with his colleague saying they are selling really fast, 'oh I was going to show you number x but it sold 2 days ago' (actual sale for the flat in question was 14 months ago) They aren't selling fast and only 2 properties out of about 50 have been sold. The flats are being rented but I don't know how many are occupied. I am wondering, what are the downsides to buying if the building is owned by the bank? And how desperate will they be to sell? I guess I should be able to get it for a lot less than 385 but how low can I realistically get it for?
thanks

[Jeannie D]

I bought my house directly from a building society. There was no real difference to buying it from the building society rather than a private owner other than:

1. When I was negotiating a price, the local branch manager had to obtain approval from someone in authority in HQ. This slightly slowed down the negotiating process but not by much.

2. The building society made it a condition that contracts had to be exchanged in 28 days, partly because the house was sitting on their books eating up service charges. In the end, the 28 day requirement was no problem for me but was for the building society, because of the need to keep referring the documents to the relevant boss in HQ.

I don't know whether either would apply in your case but just be prepared for that extra layer of administration. On the other hand, if only two of the 50 properties have sold - and bearing in mind that currently, it's a buyers' market and people are presently offering between 10% and 15% less than asking price, you might want to do a bit of homework before you make that offer. I suggest that you look at sites such as Mouseprice or Propertysnake to assess what the two "sold" flats went for. Good luck.

[Dan S]

You'll be able to secure the property for less that's for sure. It's amazing what a difference it makes when there's no emotion involved for the seller. As Jeannie pointed out, the bank will be eager to simply get rid of it.

The only issue you may have is securing a mortgage on it, since many lenders aren't particularly keen to hand out money for newbuild homes. This is especially true if you're a first time buyer, where you'll need at least a 15% deposit.

Good luck with it all!

[Richard Webster]

You should not base your offer on a percentage of the asking price, but you should look at what other similar properties in the area are selling for in the open market. The fact is new or nearly new now won't cut much ice in 5 years time when you might want to sell it.

[Dan S]

Richard is absolutely right. A newbuild today, is a characterless (in some people's opinion, and then can be difficult to sell) home with a second hand stamp on it in 5 years. I do sympathise the prices in London are very expensive though.

[New Homes Expert]

Best advice is NOT TO BUY new build flats!
Over-priced, badly built and very expensive management charges.