Is this one of the best times to buy a new home?

publication date: Apr 8, 2010
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Is this one of the best times to buy a new home?

If you have the money - and can get a mortgage for a new property - then the coming months is possibly one of the best times to buy a new home.

Unlike second hand home owners, who don't have to sell their property, developers do and are therefore offering some cracking deals to buyers!

But don't forget that it's not just good deals they offer, they are also typically 'A' rated homes on Energy Performance Certificates, which mean they are extremely energy efficient and should therefore have lower utility bills than an equivalent second hand home, which could save you a fortune at the moment!

Deals Developers are Offering

  1. Pay your stamp duty (1%; 3% or 4%)
  2. Pay all your fees, including legal fees
  3. Pay for 75% or 85% of the home and buy the rest at a later date - at the market price at the time you buy the additional 25%. This will be less if the market falls and more if the market goes up.
  4. Free carpets, curtains, appliances, garden landscaping etc.
  5. Pay your mortgage for you for 1-2 years
  6. Freebies - free holiday/car etc
  7. Part exchange your current property (ie buy it in return for you buying theirs)
  8. Rent before you buy - and your rental payments go towards a deposit

However beware of these deals. What you need to know about new builds before you start negotiating is:-

  1. They are often priced between 10% and  20% more expensive than their second hand equivalent (excluding character properties).
  2. The items that they 'add in' will cost them a lot less than they would cost you.
  3. There are on average 80 defects per new build in the UK (ref: Inspectorhome) so you MUST have a snagging survey built into the purchase contract to take place before completion.
  4. New builds have their own, often 'restrictive' contracts to buy a property - so never use a solicitor recommended by them, even if they are free, always use an independent solicitor of your own.

Once you know all of this, use the following tips to help you to negotiate with new builds:-

  1. Make sure you have a copy of a mortgage agreement in principle (MAP) from an Independent Financial Advisor (IFA) or mortgage lender to prove that you can afford the property.
  2. Try to be a cash buyer, either by renting first or selling your own property before you offer.
  3. If you can't be a cash buyer, then ask if they will Part Exchange your property.

Once you've established that you are willing to buy, ask which plots they have a deal on - they will often give deals on 'difficult' plots to shift or ones which have more profit on. Use the offers they give on some plots and ask them for the same offers on the one you like.

Check out and have comparisons of similar second hand properties (or new builds) which are a lower price.

Be aware of how much these deals are saving you. Offering to pay the stamp duty might seem a 'big offer', but it is usually only a 1 or 3% discount, when you should at the moment be getting up to 20% discount or more off a new build property. Sometimes it's better to ask for the cash than to ask for appliances etc.

If you like the kit in the showroom, then ask for that kit to be priced up - see how much it is, it might equate to a 1% or less discount, so you might be better off negotiating a percentage off than asking for fixtures and fittings.

At the end of the day, show you can afford the property, are in a position to go ahead and purchase, are keen to buy theirs - but you have others you can offer on. Make sure you negotiate a good discount either by accepting offers the developer makes, or ideally by negotiating a bigger discount of straight money off the property.

If you need a developer's offer looking at or have a new build question that needs answering, then contact us or tel 0845 838 1763 for an independent answer.


Need help with a property problem? Have a question? Why not call Designs on Property on 01652 641 722 or Contact Us via email.
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