Eager homebuyers are now being offered a variety of incentives by developers, with everything from free furnishing packages to travelcards becoming more and more common.
But for anyone who is used through the freebies, or could they be just masking high asking prices on expensive new-build homes?
Here, we take a look at the various incentives now available on new developments, and assess whether they’re well worth your while.
lb40,000 house-price discount and a travelcard
Stratford in East London is better noted for the 2012 Olympics, but it’s also the place to find one of the biggest regeneration projects in the UK, with around 3,000 new homes set to become built between now and 2030.
At its Legacy Wharf development close to the Olympic Park, Bellway is luring buyers with the promise of price cuts as high as lb40,000 and a free annual London travelcard, worth lb1,658.
Even with the discount, however, you’ll need deep pockets to purchase at Legacy Wharf – in which a three-bedroom apartment costs lb549,995.
If you've got a smaller budget, equivalent properties within the same area are presently available on Rightmove with prices from lb400,000 – though they’re resales, not completely new.
Same house price, but stamp duty, attorney's fees and soft furnishing paid
The popular commuter town of Leighton Buzzard in Bedfordshire is ideally situated for people working in London, with more than 60 trains each day running to Euston.
Just outside the town, you can buy a property at Catalyst’s Rutherford Fields development. Some plots here have a selection of incentives, including paid-for stamp duty and legal fees, in addition to a soft furnishings package composed of curtains and blinds.
Prices are relatively reasonable, too. Three-bedroom properties at Rutherford Fields cost from lb340,000, compared with lb250,000 to lb385,000 for equivalent resale homes nearby.
lb20,000 house-price discount, light fittings and turf
CALA Homes provides an array of incentives at its developments, including Shopwyke Lakes in Chichester, West Sussex.
If you choose to purchase the five-bedroom ‘Wittering’ property (costing lb675,000), you are able to benefit from lb20,000 off (already contained in the stated price), free carpets throughout along with a turfed rear garden.
If you’re thinking that lb675,000 sounds a bit expensive, you may be correct. Five-bedroom properties for re-sale within a mile of the development are listed on Rightmove with prices between lb425,000 to lb650,000.
Appliance upgrades, new floors and a moving contribution
Barratt Homes, the UK’s largest housebuilder, proudly advertises its freebies across its online listings.
The incentives provided by Barratt vary significantly in one development to another, though stamp duty cuts and part exchange deals are typical.
On selected plots at its Wigston Meadows rise in Leicestershire, Barratt offers an upgraded kitchen with integrated appliances (worth lb3,800), flooring (lb4,200) and lb2,000 towards your moving costs.
On the ‘Alderney’ house type, that means lb10,000 price of incentives on the four-bedroom home costing lb369,995.
This price, however, is right at the top end from the local market, where four-bedroom resale properties are available with prices of lb285,000 to lb370,000.
Rent taken care of three months
Shared ownership schemes – where you buy a part of a house and pay rent on the rest – can offer a means on to the property ladder for cash-strapped first-time buyers, especially in London and also the South East of England.
The downside, however, would be that the cumulative price of the mortgage on the share you’ve bought, the rent around the share you don’t own, and the annual service charge may become very expensive.
This has led developers to offer incentives on shared ownership plots.
The housing association Notting Hill Genesis will pay the rent on its share from the property for that first three months when you buy a home at its Aspire N13 rise in Enfield. The minimum share you can buy is 25% for lb98,125.
Are new-build incentives worthwhile?
Upgraded furnishings and annual travelcards are ‘nice to have’ freebies, however that such incentives are now being promoted as a way of luring you directly into purchasing a property, and could be over-valued.
There are only a handful of instances where incentives should factor to your thinking.
Stamp duty
Paying your stamp duty bill could well be the most typical incentive developers offer, and it is usefulness depends upon the home you’re buying and whether you’re a first-time buyer or otherwise.
If you’re buying your first home, you don’t need to pay stamp duty on the first lb300,000 – so the incentive wouldn’t be necessary on many properties.
On a far more expensive property, however, you may earn a large saving, meaning a stamp duty incentive might be worth taking into consideration. On a lb500,000 home in England, the stamp duty bill would be lb10,000 for a first-time buyer, or a whopping lb15,000 for an existing homeowner.
Part exchange
Some of the largest developers in the united kingdom offer part exchange incentives, where they’ll accept purchase your existing home, leaving you chain-free capable to move into one of their new-build properties faster.
The most important thing to note here's that there’s no guarantee you’ll get the same price you’d achieve around the open market for your property, regardless of whether the developer says it’s had several valuations undertaken by local estate agents.
Part exchange can be handy in a slow market where you’re struggling to sell but, as with trading in a car or phone, you’ll pay a cost for that convenience – so you’ll have to do your own research and be ready to negotiate.
Should you buy a new-build home?
You might have realized that some of the new-build developments previously mentioned cost the very top end of their local market.
It’s true that new-build homes come at a price premium. Developers argue the additional cost is justified by owning a brand-new property, along with the quality of build, furnishings and efficiency.
Critics, however, say that builders are plumping up prices, and that homes are full of snagging issues – minor defects or omissions during the construction.
For some, being the first those who own a house may be worth the cost. But the prevalence of schemes for example Help to Buy and shared ownership mean first-time buyers might incorrectly think a new-build is their only option.
If you’re considering a new-build home, it’s vital that you’re aware that this industry isn’t tightly regulated, so you should question everything you see. Before you move in, it’s worth spending money on a snagging survey to trap any difficulties with the build. Always do your research, disregard the marketing spiel, and don’t feel pressured enter into.
Advice on your mortgage options
When purchasing a home, it can be useful to take advice from the whole-of-market mortgage broker, who are able to find the right deal for you according to your needs.
