Help to buy discounts

Snolp2

Hi all

I am currently looking at a new build home. However I was informed by the sales person that house builders are unable to offer any discounts off the list price on this scheme. Apparently it is a requirement by the government.

Does anyone know if this is true, or just sales spiel?

Thanks

somethingcorporate

Sounds like spiel to me! Prices are (usually) always negotiable!

greenface

Youve not said which "SCHEME" is your scheme and the T&Cs but in effect you could be paying over inflated prices to get a discount down to still above prices and paying for it . Beware of the too good to be true schemes

Snolp2

It's the help to buy scheme.

greenface

If its not worth what your willing to pay offer less . If it is worth what your willing to pay . Offer less .

dgtazzman

Or alternatively, get them to gift part of the deposit instead, as developers want to sell at list price as much as they can as not to depreciate the value of the other properties they want to sell on the estate. If they won't budge on price, try a different angle of attack (could also try for extras like carpets etc.)

bells_on_it

Anymore views on this as have same predicament - being told as part of help to buy scheme government will not allow other incentives ie developer paying your stamp duty or throwing in carpets etc??

bowlhead99

bells_on_it wrote: »

Anymore views on this as have same predicament - being told as part of help to buy scheme government will not allow other incentives ie developer paying your stamp duty or throwing in carpets etc??

It's understandable that the govt would not allow "incentives" when they are acquiring equity in your home for a set price :

-Fair price for the empty house allegedly 100k
-Developer buys you 4k carpets and a 2k sofa so only nets 94k for the house itself. Blatantly the house itself is not worth 100k if you tried to sell it tomorrow taking the carpets and sofa with you
-Government was willing to give an equity loan of 25k for 25% of a 100k house
-Government is not willing to take 25% ownership of a 94k house and still pay 25k for it

or

- Fair price for the house allegedly 600k and you want a 10% equity loan
- Developer writes a cheque for 24k stamp on your behalf so only nets 576k
- Government has put in 60k towards a 576k house (10.4% of real sale value) but only receives 10% equity in it

So you can see that aanything that artificially maintains the price of a house by giving you personally an incentive or a kickback is an abuse of the government's generosity - as they get screwed if they put money in and you take money or something of value out for yourself on the side.

This is the same reason why lenders have limits on newbuilds: developer sets price at 100, "gifts" you a 5k deposit plus carpets and curtains - lender would be dumb to use 100k as the value in any loan-to-value assessment of their risk.

So "incentives" are out (or if not illegal, they should be, to protect my taxes!)

However there is absolutely no reason why the government should object to a straight reduction in the price of the house. If the developer says its 'worth' 600, which is a number they made up themselves hoping they could sell it at that price, and they decide to sell it to you for 590, which is the actual price the market will bear and at which a buyer can be found: the government should not have an issue. The government would simply put in 59k for its 10% stake while you put in 531 for your 90%.

So in summary:
-Most popular way of negotiating for developers has always been incentives or kickbacks because they maintain an artificially high headline price which is positive for them as they try to sell similar houses. This allows the government and any other lender to be screwed over with a benefit to the buyer and the developer, so is "abuse".

- Least popular way of negotiating for developer is to lower the house price as this keeps the headline price at the real value of the bricks, mortar, square footage and location involved, and restricts their ability to charge high prices for other properties they're developing. Amending the price of a house to fair value is not at all an abuse of the government or any other lender providing finance for the purchase, but it's not something a developer wants to do.

Their choice not to discount for you, at the moment, is their personal choice and it might change if the estate can't be sold in a year's time when they really want to get the cash banked and move on to focus on other developments. However, as the government schemes are making purchases very much more affordable for buyers, it's likely that people will overpay vs what they would have otherwise paid, and they will be able to sell at full list if they wait long enough. Hence them not wanting to give you a discount today.

CluelessFTB_2

I asked the same a few days ago. They can help they will tell you they can't but I had an email from barratt last week saying 'Help to Buy weekend - come in and reserve your property this weekend and we will pay your stamp duty and £750 towards your legal fees'. Another builder at the weekend told me they wouldn't be allowed to do that but soon back tracked when I showed her the email from barratt! She said they could only give a discount on the plot and give us extras.
So they can help you - I don't think they are allowed to give you a 5% deposit but they can help you with stamp duty, legal fees, extras on the property and lower the asking price.

thedalmeny

Don't listen to the developer - it's rubbish.

I'm currently going through HTB (Mortgage offer received, approved on scheme)..

I got the following thrown in;

- 10k off the list price (192k to 182k)
- Carpets
- Turf
- Integrated Fridge / Freezer

Good price i feel aswell, only a couple of houses of this size on the market within a 5 mile radius close to this price (All above)

GK23

Hi there, I tried to get some discount off asking price but got a reply they can't do that on the scheme..and no big builder is offering it..can you tell me which locations you are trying to buy house at? I am based in London and trying to buy near Uxbridge from weston homes but no discounts and I don't feel like buying at asked price when they are easily giving at least stamp duty off...:-(