The Buyer's Guide to
New Home Bargains in the UK
9th March 2009
Tailored Home offer advice on how to get the best deals on new homes in the UK.
EVERYONE is looking. Figures for January show the average price of a home in England and Wales fell to £156,753. Some of the best deals around are on new houses as the second hand market sits it out and waits for recovery. Here is the Tailored Home buyers guide to new build bargains in 2009.
IF you are in the sales business, it is no laughing matter. Barratt has just revealed the average selling price of a new house fell by 9.7% to £160,000 last year. Excluding the effect of affordable homes, average selling prices have decreased by about 27% since June 2007. So how can house hunters take advantage of the best deals in 2009?
Stay Liquid
The first rule of the jungle: Cash is King.
The credit crunch effect means that anyone who can get their hands on money is in a strong position.
Investors who have stayed liquid during the last 24 months, particularly foreigners, are moving in on the UK market to secure major deals.
With lenders still reluctant to offer mortgages, cash buyers are getting the best deals from builders who are desperate for a fast sale.
Do not accept claims that their prices are already rock bottom. Haggle and consider walking away unless the seller offers a discount.
Receivership
Thousands of companies are expected to go into administration or receivership over the next year, and that means the cheap sale of their assets.
Keep a close eye on the business and financial sections of newspapers to identify failing firms.
Many of the smaller companies will be swallowed up by their bigger rivals, but few in the current climate can afford to sit too long on unsold stock.
Buyers who can get their hands on cheap loans can take advantage by investigating where companies have faltered due to cash flow problems.
Off Plan
Off-plan sales have increased in popularity in recent years, offering another opportunity for bargain hunters.
Prospective purchasers can be too quick to move in on new builds. They are usually keen to cherry pick the best plots.
Off plans sales also mean buyers can personalise the interior of the property. But as prices have fallen, early deposits of up to 10 per cent placed on drawing board plans have been lost after agreements failed to complete.
Developers in these circumstances will look for fast sales at discount, with room to lower prices because deposits have already been paid by those who are tens of thousands of pounds out of pocket.
Bidding
If bidding for a bargain doesn’t frighten you, then auctions remain one of the best options. But be wary. As many bad deals as good go under the hammer. Auctions represent an opportunity for sellers as well as buyers to come away happy.
The secret to success is to ensure you know some of the tell tale signs of the bad properties to avoid. Don’t get sucked into paying more than you can afford and make sure your finance and legal matters are properly organised before getting involved in a bidding contest.
Look Further
As long as location is your priority, unless you are very lucky, it is unlikely the biggest discounts are going to come your way.
The simple fact is, the more flexible you are about locality the more chance you have of finding that deal.
Some of the most affordable homes are currently found in south Wales and Scotland. According to latest Land Registry data for January 2009, the average price of a home in England and Wales was £156, 753. In Wales the figure drops by almost 50 per cent to £114,990. The North East is currently the cheapest place to buy in England, with houses selling at an average of £113,900. This does not of course mean these areas offer the best discounts. Shop around and look out for developers around the UK who are offering the best percentage deals. When the recession begins to recover you will be much better placed to capitalise on any gains.
Don’t Be Fooled By Figures
Claims of vast savings on new homes can be attractive, but be cautious of clever sales speak. Many properties have been listed at unreasonable and inflated prices in the first place, so claims of 20-30 per cent discounts are often fake.
Carry out your own research. Some online home sales data bases date back many years detailing actual prices paid.
Land Registry and local estate agents can also offer good information on price trends to ensure the real discounts are identified.
Incentives
Some of the biggest house builders are offering incentives as well as discounts to shift stock. Deals can involve paid for places at private schools, cars, luxury holidays, free carpets, service charge holidays and free first class travel by rail for a year.
Other more practical incentives are all utility bills paid for a year, solicitor’s fees, council tax, even free warranties for appliances and home insurance.
Know The Players
Know who you are dealing with. Just understanding the market is not enough. The companies you are dealing with have trading cycles, which dictate when they need to shift more houses.
Look into when a firm’s end of year trading period is due by investigating its annual accounts or checking out its web site. A simple call to the company requesting the information works just as well.
Some developers are keen to increase sales in the run-up to the close of their financial year, particularly if listed on the stock exchange.
Take Some Time
And finally, when you’ve found that bargain… don’t rush in. More buyers are left cursing a hasty purchase, than a missed opportunity. Take your time and haggle in person, not on the phone. Keep cool, look confident and stay polite, but most important of all smile.
It’s a jungle out there, but if you keep your sense of humour and your wit you can come out smiling.
About The Contributor: Tailored Home are the UK’s premier bespoke property search agents. The service is completely free and they act on a client’s brief to purchase real estate anywhere in the world. For more information contact Julian Constance on ++ 44 (0) 845 838 7143 www.tailoredhome.co.uk.
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