Housebuilders are attempting to do what Alistair Darling failed to achieve in his spring budget - kick-start the spring property market with some attractive buyer incentives, even in one case offering to pay an annual commuter rail ticket up to the value of £3,000.
Shared-ownership buyers were the only ones to receive a budget bonus when the Chancellor scrapped stamp duty on equity stakes of less than 80 per cent. Conscious that Easter heralds a fresh stage in the homebuying calendar - the time of year when tentative plans turn to firm pledges - developers are offering ever more tempting deals.
Whatever the state of the market, there are still families keen to trade up to a house in a better area and first-time buyers who want to get on the housing ladder. Job-movers, newlyweds, divorcees and downsizers are all out there looking for the right property in the right place at the right price.
If you are trapped in a chain or cannot afford the deposit, buying a brand new home may be the solution, as some developers will buy your old property and offer your new home on a no-deposit basis. But remember that taking incentives reduces your scope for negotiating a discount on the purchase price - that is why builders offer them.
Deals dressed up
Developers are reluctant to advertise price cuts, preferring to dress up reductions in the form of stamp-duty refunds, part-exchange deals, mortgage subsidies, paid deposits and furniture packs.
One in five Londoners aged between 25 and 45 is more likely to buy a new-build home if offered sweeteners such as paid professional fees, according to a poll by Ipsos MORI for developer Crosby Lend Lease. For younger buyers with limited savings and borrowers who are unable to get higher loan-to-value mortgages, developer extras can make a big difference.
“The purchase price is the first thing buyers look at but associated moving costs can be quite onerous and a real deterrent,” says Steve Hogg, partner at chartered surveyor King Sturge. “Buying a £500,000 home can easily cost another £50,000 in stamp duty, legal fees, removals and other extras.”
Trainee City accountant Allan Orr and journalist partner Chrisoula Kouremenou received incentives worth £14,700 when buying a two-bedroom flat at Mulberry Gardens in Streatham.
“Having the five per cent deposit paid for us was a huge help and made the difference between us being able to buy and not buying,” says Allan, 28. The property cost £236,995 but developer Barratt also paid the one per cent stamp duty and contributed £500 towards legal fees.
'It is worth negotiating where the price is just above stamp-duty threshold'
Look for genuine deals and don’t be swayed by gimmicks offering cars and holidays. Above all, be sure you are paying a fair price for the property. Some builders will give discounts of 10 per cent, perhaps more, if you haggle effectively and are ready to exchange. Insiders advise buyers to be “businesslike but realistic” when negotiating with sales staff.
Ultimately, the only way to be sure a deal is a good one is to know the local market, which developments are selling reasonably well, which are struggling, which represent good value for money and which are offering genuine price cuts.
Clearly, it is worth negotiating down where the price is a little above the stamp duty thresholds of £250,000 and £500,000. Parking spaces (up to £75,000 in London) are another obvious bargaining counter.
In London, demand is weakest for mid-market flats in the £500,000 to £1 million bracket, which in previous years has attracted City bonus buyers.
Part-exchange deals, where the developer agrees to buy your old home at full market value, can be a boon because you get a hassle-free, guaranteed sale with a Home Information Pack paid for. Normally you have to trade up to a new property that is at least 30 per cent more expensive.
The name is bond...
Schemes allowing buyers to defer the deposit money are gaining momentum in the wake of the credit crunch.
Leading developers including Barratt, Taylor Wimpey, Redrow and David Wilson Homes are the latest to sign up to these “deposit guarantee” schemes aimed at helping buyers who purchase homes off-plan - at least six months between exchange and completion.
Instead of the full 10 per cent deposit, homebuyers pay a much smaller premium on an insurance-backed “bond” that guarantees to reimburse the developer if the buyer fails to complete the contract.
Typically, the premium is no more than five per cent of the deposit due - say, about £1,500 on a £300,000 home where the deposit would normally be £30,000.
Buyers are obliged to pay 100 per cent of the purchase price on completion, so they are not getting a property on the cheap.
XBond is underwritten by Zurich, the Swiss insurance group. Buyers can apply online on www.thexbond.com.
* West Village, Reading, Berkshire. “Dream Start” package offered to first-time buyers. Developer Barratt will pay the deposit, stamp duty and up to £1,000 legal fees. Buyers pay only 75 per cent of the purchase price, with 25 per cent deferred for up to 10 years. No rent or interest is payable on the deferred amount but it has to be paid back on resale. Prices from £195,950. Call 01189 513038.
* Bauhaus, Croydon, Surrey. Five per cent deposit plus stamp duty paid. Prices start at £189,995 for one-bedroom flats. Call Durkan Estates on 020 8681 2002.
* Ashcroft Place in Leatherhead, Surrey. Interior design vouchers for £7,000 offered by Linden Homes. Prices from £199,950. Call 01372 361275.
* New Murcia, Hitchin, Herts. Annual rail ticket to central London paid, worth £3,000. Prices from £169,950. Weston Homes (0845 638 5007).
* Uber, Walthamstow. Higgins Homes is offering a “Pick Me” deal — move in for £99 with five per cent deposit, stamp duty and legal and survey fees paid. Prices from £205,000. Call 020 8521 7885.
* Eden Village, Sittingbourne, Kent. Part-exchange at full market value offered by developer Barratt. Town houses from £325,995. Call 01795 599055.
* Mosaic, West Molesey, Surrey. Mortgage paid until January 2009, plus Easy Move package refunding legal, estate agents’ and HIP fees. Three-bedroom houses from £350,000. Call Fairview on 020 8979 8978.