Newbuilds off plan - deposit question

[mrmoore 0]

Hello,

 

I'm being sent a lot of newbuild developments all over the country, some nice ones for investment, some aren't.

The problem I find with a lot of these developments is that they ask for 30%, sometimes more on exchange of contracts which I think is ridiculous.

I'm not about to give my money (£40-£60k) to the developer, to just sit in their bank account for 2 years. I'm (we are) basically funding the developer's work.

 

Am I missing something? is there another perspective to this? (assuming I'm willing to wait 2 years for a property).

[Marius 7]

Along with the lack of security/legislation provided by government to protect investors from renegade builders, I fully agree.

 

In Norway we're lucky in that by law, all developers/development projects have to have suitable insurance or a bank guarantee so that people won't lose their deposits in the event a building is not completed. On top of that, the deposit requirement is only 10% provided you aren't counted as a professional investor (the criteria being that you don't have more than 5 properties I think). If you're a professional investor, the deposit requirement is 30%.