New Build Incentives - What’s fair?

Charlie1985

Hi All,

Hoping for some advice. I am in the process of buying a new build property with Red Row. The house type and plot we liked has come back on the market as the previous buyers had to pull out.

We were gutted when we first missed this plot but now hopeful again as it’s back on the market. There are some points I wanted to raise:

1. The price it was initially advertised for back in July 2020 and got reserved by the previous buyer was £650k. However the builder is now advertising the property back on the market for £659k. They said this is due to the demand in the property market
2. We have been told the property is almost build complete so all the options have been picked by the previous buyer and we have been told we can now only change the carpet colours
3. The previous buyers had agreed for an alarm to be fitted as an incentive but the builder has said they can now no longer offer this.
4. The previous buyer was in a complex chain and so did not end up exchanging contracts hence why the builder has put it back on the market after 3 months.

What % incentive pot do the sales team usually have to play with on new homes for each plot? Also as a buyer what do you think would be reasonable.

When we purchased our last new build house in 2016  we got around 5% in incentives. We was really happy with this.

However this house we are looking to purchase is a premium home which means it has a decent spec (for example flooring included, integrated appliances, under floor heating to parts etc). The deal breaker for us however is the stamp duty as it’s working out just shy of £28k as we have other buy to let properties already. Red Row have said the only incentive they can do is £14k towards the stamp duty. This works out at just over 2% of the purchase price. They said that’s all they can do as they are confident the property will sell. Are they just using a typical sales tactic,

From past experiences do people think Red Rows incentive offer is reasonable? I was ideally looking for them to cover all my stamp duty and legal fees

I have a meeting with them tomorrow to discuss the property in more detail and they have already mortgage qualified me. They now know I am good to proceed. In tomorrow’s meeting I was tempted to just say I need all the stamp duty paying and request them to call their area sales director again as it’s a deal breaker.

Looking for advise on the questions above and if people think Red Row will accept my offer. Do people think my incentive ask is fair? 

Any advice would be much appreciated.

Many thanks as always

Charlie

Charlie1985

Apologies I forget to mention they said the house would ready to move into in January 2020 as it’s almost build complete. Not sure if that makes any difference to the negotions.

Charlie1985

*negotiations 

anselld

They know you are keen.  They know you can afford it.  It just depends how confident they are in finding alternative buyers and how firm you hold your line.

New build as a buy to let investment seems an unlikely choice so any alternative buyers would not have the SDLT problem to the same extent anyway.  They may consider it is not their problem to solve and meeting you half way seems fair (in their view).

AdrianC

What is on the table is ENTIRELY dependent on how desperate they are to shift THAT plot on THAT development.

If they think it'll sell easily (and the increased price suggests they do), then the offer will be minimal.
If they don't think it'll shift quickly, then there will be more available.

tinytiddles

As others have said, it entirely depends on the demand for the property, it is also worth bearing in mind that if you’re going to take a mortgage most lenders will only allow up to 5% before it starts affecting your LTV on your mortgage.
We bought a new build 3 months ago, and we got 5% cash / non-cash incentives on a home that was ready for occupancy plus an amazing deal on a part ex (literally a couple of grand under market value which frankly would have been gobbled up in estate agent fees anyway). However this house was the last one of its type available, had been standing empty for 6 months and the salesman was also silly enough to let slip that the sale had fallen through twice already (mortgage issues, nowt wrong with the house) so we used this very much to our advantage. All I would say if you don’t ask you don’t get but if there is interest from others you may have to bite the bullet and accept a higher price with fewer incentives. Good luck!

Charlie1985

Thanks all for the replies. Visited the builder this past weekend. Turns out all the options have been chosen. We like all the options except the flooring (it’s too dark). It’s not been fitted yet but they said it’s been ordered and cannot be changed. This was quite disappointing.

Also over the weekend there was a staff member from another site so she was not too familiar with the specification and incentives. On Friday we was offered £14k towards stamp duty. I said I needed a better contribution and she emailed me back to say now they can only do £10k. Seems weird the incentives have now decreased. Maybe I should speak with the resident sales lady when she is back.