How much to offer on a new-build?

freebo_2

Been looking at a development recently started, all the homes due to be completed before the stamp duty holiday have sold but none (or very few) of the others. So a large number of homes still to be release.
The one I like has been released but will not fall under the SD holiday, unless its extended. They are offering an "incentive" worth about half of the SD.
Any guidance on offering below ask on a new build? I've never bought one before, always established homes, I'm thinking somewhere between 5-10%?

jcrennie

Don't think you're likely to get below the asking price on a new build unless they are trying to flog the last couple. Worth a try, but the developers will just hold out I suspect.

pinkteapot

Unlikely to get anything off asking unless the development is finished or almost finished and they’ve failed to sell them off-plan. You’ll only get a bargain if the house has been finished and stood empty for six months (a friend once got 30% off original asking that way, but it was a small developer in dire straits). 

With new-builds you can normally haggle over the optional extras - pay asking but get some upgrades you want thrown in for free. 

Trouble is, if it’s a big development with a few more years to go the developer doesn’t want the sold prices showing future buyers that they give discounts. 

RelievedSheff

As the others have said with new builds you are unlikely to get a lot or anything off the asking price but should get some incentives thrown in.

It sounds like the properties are selling quickly so there is little reason for the developer to accept lower than the asking price.

SharkMoney

Forget about asking price - they won’t budge. But that’s not what counts, it’s the “deal” that matters. 

Ask for mortgage contribution in lieu of stamp duty payment. Ask for appliances, carpets (easy £2k). Ask to see the upgrade brochure and circle everything you want. 

OldMusicGuy

It all depends on demand for the homes, the plot desirability and your situation. We are cash buyers in the process of buying a new build. Like others said, the area for negotiation is usually stamp duty and extras, most developers won't negotiate on asking price unless they are struggling to sell. 

In our case, we looked at several new build developments just as COVID was hitting and prior to lockdown. On one development, they were clearly keen to negotiate because they were struggling to sell the house type we were looking at. However, the development wasn't as nice as the one just down the road that we bought from. They were in less mood to negotiate because the houses and development overall were more desirable.

On this development, some people who moved into a house in March this year have just put it on the market. Their asking price is over 8% MORE than the asking price when they bought it. So they (and their EA) clearly feel they can try to get a premium for some reason, they clearly think there is demand for properties in this area. The remaining houses on the development are all selling steadily.

You can certainly try an offer but you had better be prepared to walk away. Unless they are struggling to sell, it's unlikely to succeed.  

freebo_2

Thanks all, good advice re: the "extras".

I'm not convinced now is a good time to buy but will take the above into consideration.

Crashy_Time

freebo_2 said:

Thanks all, good advice re: the "extras".

I'm not convinced now is a good time to buy but will take the above into consideration.

https://www.telegraph.co.uk/business/2020/08/26/banks-told-end-mortgage-holidays/?li_source=LI&li_medium=liftigniter-rhr
Developers will be under pressure soon IMO.

tim_london

freebo_2 said:

Thanks all, good advice re: the "extras".

I'm not convinced now is a good time to buy but will take the above into consideration.

I just bought a new build.  5% discount off list price plus SDLT paid for (although not much due to discount).  It was already built as part of their phase 1.  The developer has no upgrade options and has a strict 'cookie cutter' rule.

The estate agent will have a good idea of what the developer will accept.  Remember there are still negotiation tactic involved as they will always reject your first offer.  I went in a little over 10% under the list price to start negotiating.  I am a FTB, 1 month rent notice.

Don't forget some new builds will face uncertainty in March because help to buy is reducing the max eligible house price based on region.  Find a property now that would not be eligible after March and I think you'll find a good deal.

RelievedSheff

tim_london said:

freebo_2 said:

Thanks all, good advice re: the "extras".

I'm not convinced now is a good time to buy but will take the above into consideration.

I just bought a new build.  5% discount off list price plus SDLT paid for (although not much due to discount).  It was already built as part of their phase 1.  The developer has no upgrade options and has a strict 'cookie cutter' rule.

The estate agent will have a good idea of what the developer will accept.  Remember there are still negotiation tactic involved as they will always reject your first offer.  I went in a little over 10% under the list price to start negotiating.  I am a FTB, 1 month rent notice.

Don't forget some new builds will face uncertainty in March because help to buy is reducing the max eligible house price based on region.  Find a property now that would not be eligible after March and I think you'll find a good deal.

The new HTB rules won't affect every new build estate. Where we are for example all of the properties for sale by the new build developers will still come under the regional price cap which is  still quite generous for our area. 

Crashy_Time

tim_london said:

freebo_2 said:

Thanks all, good advice re: the "extras".

I'm not convinced now is a good time to buy but will take the above into consideration.

I just bought a new build.  5% discount off list price plus SDLT paid for (although not much due to discount).  It was already built as part of their phase 1.  The developer has no upgrade options and has a strict 'cookie cutter' rule.

The estate agent will have a good idea of what the developer will accept.  Remember there are still negotiation tactic involved as they will always reject your first offer.  I went in a little over 10% under the list price to start negotiating.  I am a FTB, 1 month rent notice.

Don't forget some new builds will face uncertainty in March because help to buy is reducing the max eligible house price based on region.  Find a property now that would not be eligible after March and I think you'll find a good deal.

HTB really just needs to be scrapped all together, it is purely for the benefit of developers not ordinary punters.