Developers including Hopkins Homes, Taylor Wimpey, and Tilia Homes are currently marketing properties with incentives that range from cash gifts and paid legal fees to access to cheaper mortgage rates.
Some suggest that the generosity of the freebies is linked to a recent collapse in sale numbers.
Last year, sale numbers plunged to only 7,500 – an 11 per cent decline compared with 2023 from 8,300.
In a competitive housing market, builders are under pressure to attract buyers and differentiate their developments. This has led to a variety of sweeteners aimed at boosting sales.
One of the most prominent offers currently is the Own New – Rate Reducer, a scheme developed by finance firm Own New.
David Hollingworth of L&C Mortgages said this could cut interest rates significantly.
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Other notable offers include the Deposit Unlock scheme, which enables buyers to purchase a new-build with just a 5 per cent deposit, and shared ownership, where buyers purchase a portion of a home and pay rent on the rest.
Some developers have unique offers for certain developments so this is something worth looking into.
Why do developers offer incentives?
Developers are often reluctant to drop headline prices on their homes, as this can affect the valuation of the wider development. Instead, they opt for incentives that add value without visibly lowering the price.
“Generally developers prefer to offer incentives via stamp duty, mortgage paid for six plus months, conveyancing fees or furniture packs so it doesn’t visibly dent their headline price as much.
Justin Moy, managing director at EHF Mortgages, agreed: “For anyone buying new build, drive a hard bargain and be prepared to walk away if the price isn’t right. With the way the property world is at the moment it is a buyers’ market.”
Are they worth it?
Mr Moy said: “I must admit there are not a lot of incentives specific to New Build, outside of ‘Own New’ – effectively the swapping of incentives for a lower interest in the first few years.”
Help to Buy was a Government-backed scheme, which closed in October 2022, designed to help first-time buyers buy a property with just a 5 per cent deposit.
Mr Hollingworth echoed the point that incentives can be flexible tools for affordability.
Buyers should be aware that when the incentive period ends, standard rates may apply.
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