Builders incentives

Papsie

Hello all,
I'm just about to buy a new build house. Builders are throwing lovely incentives, ie deposit boost, moving costs, John Lewis vouchers. Mortgage advisor told me the incentives must be no more than 5% of the house value. I get that the deposit and moving costs are "money" towards the mortgage. But shopping voucher?? Does that still count into the 5%?
Thanks in advance for help.

theartfullodger

Just tell them no incentives, just the right price, reflecting cost off for those "incentives" offered.

Why of why do these shysters always want to fiddle things?

(Rhetorical, I know, ...taxes of various natures)

G_M

Nothing to do with the mortgage.


SDLT.

Papsie

So, would you say the voucher is irrelevant and not an incentive? And "help towards moving costs"?
I can't find anything on the net to support it.

theartfullodger

Alleged price £125k.

"Incentives" (all) "worth" £10k.

REAL price £115k. Real worth? What an open market would get, but no more than £115k.

It's called false accounting: Well it should be.

Prove I'm rong

sst1234

Papsie wrote: »

Hello all,
I'm just about to buy a new build house. Builders are throwing lovely incentives, ie deposit boost, moving costs, John Lewis vouchers. Mortgage advisor told me the incentives must be no more than 5% of the house value. I get that the deposit and moving costs are "money" towards the mortgage. But shopping voucher?? Does that still count into the 5%?
Thanks in advance for help.

The house is clearly over priced. I have been in a similar negotiation recently. £5k John Lewis voucher, money towards deposit, moving costs. All of these incentives doubled in value a few weeks later. There is a reason the builder is giving all these things away, they are flogging an overpriced property most likely on a small development in area with not so many comparables. It means they can inflate the price and throw in incentives to make it sound like a good deal.

Beware....unless you are happy to be in negative equity for many years to come.

kingstreet

Such items are classed as builder cash incentives by lenders and will be shown as such on the UK Finance Disclosure Of Incentives form the builder will pass to the surveyor prior to the valuation.