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How to negotiate a new build house price in 2022

With very few houses on the market for sale and mortgage rates at historic lows, more people are turning to new build homes. But that doesn't mean you should just pay the asking price. Read on for tips on how to negotiate a new build house price in 2022.

Post updated: March 29th, 2022

6 minute read

How to negotiate a new build house price

House builders had a good year last year. The house builder Taylor Wimpey, for example, recorded a boom in demand for new homes in 2021 thanks to low mortgage interest rates and the stamp duty holiday. The average selling price of their properties grew by £12,000 to £300,000.

But it isn’t just Taylor Wimpey homes that are becoming more expensive. According to the ONS, new build homes rose in price by 21.7% in the year to September 2021, compared with 11.6% for resale homes.

And the good news for house builders doesn’t stop there. According to Hamptons, one in five (20.6%) who viewed a resale home in the past year also viewed a new-build one. This is far higher than usual, with the average usually about 8-9%. And while new build homes were traditionally aimed at first time buyers, last year a record 45% of new- build buyers had property to sell, up from 28% in 2019.

With house builders in such a good position, can you really negotiate on a new build house price? In short, yes! New build developers will be as open to negotiation as any other home seller. But here are some tips to help.

Knowledge is power

Before you buy a new build, it pays to do your research.

Buying a new build is much like buying a new car – you’ll pay a premium for it being ‘brand new’. But you want to avoid paying an over-inflated price. So compare the price of the property to similar new build properties in the area. Check the price per square foot and compare it to the resale market as well so you understand the extent of the premium you are paying. You can also check Land Registry for actual sold prices of similar developments in the area if you know the postcode. It typically takes 2 weeks to 2 months for sold properties to appear on this site. For more advice on buying a new build here is a full list of the factors you need to check first.

If you are buying on a new build estate or bigger development, take a look at what other properties on the development are being sold for using Zoopla and Rightmove. You need to work out:

  • How many properties there are in the development
  • How many are still for sale on the property portals
  • How long have they been marketed for
  • Whether there are other developments near by that are similar. How much are they selling for?

All of this information will give you the confidence to negotiate a lower price. It may be that similar properties are selling for tens of thousands of pounds cheaper – so start with a similar discounted offer. The worst that can happen is that they say no, but at least you have a starting point.

How to negotiate a new build house price – choose your moment

Timing is key when it comes to negotiating the price of your new build. Picking the right moment could vastly increase your chances of getting a deal:

  • Off-plan. House builders often need to secure financing in order to enable borrowing to pay for building the rest of the properties. So there are often deals to be done off-plan. It’s also worth noting that buying off plan also secures the property at today’s price rather than the value when the build is complete, which will invariably have risen in the current climate. The latest figures from the Office for National Statistics show annual house prices rose by 10% in November 2021.
  • Year end. This is the point at which house builders are under a lot of pressure to meet their sale targets. You can find out the year end – which is usually December, April or June – using Companies House.
  • Last plot or two. If there are only a few properties left to sell, the house builder will be keen to get off site and move all resources to their next project. So you may be able to help them by taking that property off their hands at a bargain price.

How much can you negotiate off a new build house?

Back in 2019 when pre-Brexi jitters meant that there were bargains to be had, you could play hardball and go in with a low offer. According to Sara Ransom, London director of Stacks Property Search, at the time you could offer 20% to 30% below the developer’s asking price.

In 2022, you’ll be lucky to get that kind of discount. But if you have the aforementioned evidence to hand and negotiate hard, then there are discounts to be had. But remember, for negotiations to work, you will have to have funds in place and be able to complete fast.

Beyond the sale price

Negotiation should focus on the price you are paying for the property. Once you’ve got this down, look at what other extras developers often use to entice buyers. Here are some of the most common:

1. Stamp duty

For example, some developers will offer to pay your stamp duty for you. This is probably the best freebie as it will save you the most money. But remember, if you are a first-time buyer you don’t have to pay any stamp duty on properties priced at up to £300,000. Before you agree to this ,work out how much stamp duty you would pay on the property to check you are getting a good deal. Find out more about stamp duty and how much it is likely to cost.

2. Fixtures, fittings and white goods

You could also negotiate a higher quality finish with higher quality kitchen units and flooring. Ask for these early on in the process and try to get as much as possible included when you haggle – and then agreed in writing in your specification and contract. If you are buying a property that has yet to be built make sure you read our guide to buying off-plan.

Offer match?

Many developers offer incentives so take a look around a number of estates where you want to buy to see what is on offer. It could be a car parking space or an annual travel card.  If your dream home is on a development without the offer and presents a significant financial saving for you,  say you’ve seen it on a nearby development and ask them to match the offer. This is a good time to also compare the quality of the different developments and choose the best builder.

Are freebies really worth it?

Don’t get fooled into taking a freebie that you didn’t want in the first place. For example, having furnishings thrown in only works if you like what’s on offer and you couldn’t buy it cheaper yourself.

Just be aware that any incentives offered over about 5% of the value of the property could impact how much your bank or building society will lend you. Any incentives to buy a property, whether they are financial or not, have to be declared to mortgage lenders. If there are loads it could affect the valuation the mortgage lender gives the property. That could, in turn, affect how much you can borrow.

Get fee-free mortgage advice on your new build purchase from a trusted mortgage broker today

Get it in writing

If you are successful and negotiate a reduced price, stamp duty payment, or optional extras thrown in, then well done! Now make sure that you get everything that has been agreed in writing. When you appoint a solicitor explain to them what you negotiated and show them the written evidence so they can make sure it is written into the contract.

Get the right legal advice

Before agreeing to have the house builder contribute to or pay your legal fees, make sure this doesn’t come with strings attached. Often the house builder will have an arrangement with a legal firm. But you should not feel obliged to use them.Shop around for the best legal firm.  A good place to start is our our guide to new build conveyancing.

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