Homebuyers are set to benefit from price-trimming and generous incentives from developers across London this spring as the gap in price between new-build and second-hand properties starts to narrow.
Analysis carried out for Homes & Property by data firm LonRes reveals that since last summer, flats in Nine Elms at Vauxhall, one of Europe’s biggest regeneration projects with plans for 20,000 new homes, have been selling at 14.5 per cent lower than the initial asking price.
The figures apply to so-called re-sales — where flats in developments have been bought off-plan before construction was completed. Such flats were initially bought by investors or speculators and have never been occupied and are back on the market.
Marcus Dixon, head of research at LonRes, says: “A lot of these developments were tailored to investors but now these schemes are completing and ready to move into, there are opportunities for home owners, and while you are still paying a premium over a Victorian conversion a few streets away, that premium is not as high as it was.”
Dixon believes these re-sale properties were over-priced in the first place so it might even pay prospective buyers to wait awhile.
Now is a good time to negotiate on a new build
As Ed Lewis, director of estate agent Savills, says: “The housebuilder’s job is to turn over stock and it’s all a numbers game.’’
With housebuilders quoted on the Stock Exchange that crunch point is usually their financial year-end. Better than expected market conditions outside London helped some post healthy operating profits of more than 20 per cent in the past few weeks. So they can afford to accept lower offers on the last few flats in a block if it means hitting their sales targets.
When it comes to the last few available flats in a block, it is worth asking for a discount on the asking price, especially where there are competing schemes locally.
Russell Quirk, chief executive of online estate agency eMoov.co.uk, predicts a slowdown in the rate of price growth of minus 4 per cent in London this year, which would mean a reduction of £22-25,000 on the average new-build property.
Get your stamp duty or legal fees paid
Barratt already offers incentives across many of its developments, including paying stamp duty of up to £14,000 on flats in its Catford Green scheme in south-east London, and similar stamp duty contributions at Enderby Wharf on the south bank at Greenwich. Prices start from £366,000 and £430,000 respectively.
Housing associations are promoting similar deals on their private stock. Notting Hill Sales, a subsidiary of the association, is offering buyers £2,000 towards their legal fees at its Royal Albert Wharf development in Docklands, providing buyers complete their purchase in eight weeks.
Shared-ownership deals, with subsidised rents, are also available on some of the 1,500 homes planned for this development near Gallions Reach DLR.
Good deals on commuter homes
Incentives are also available for family homes in commuter land. At Bolingbroke Park in Cockfosters, L&Q is asking £715,000 for its four-bedroom houses but will pay stamp duty on selected properties “for a limited time only”.
For Bewley Homes, the big selling point for its three- and four-bedroom houses at its Parklands development near Reading has been Crossrail, with prices from £447,500. Now, Bewley will pay £5,000 towards stamp duty and £1,000 towards legal costs.
Commuter towns are good territory, too. Linden Homes has been cutting prices and offering part-exchange deals on some properties at its Oaklands development in Horsham, West Sussex. Prices from £272,500. Also, Linden is offering part-exchange on certain schemes in London, including The Metropolitan in Battersea, not far from Nine Elms. Prices start from £749,950.