Summer sales: where to find the best new-homes discounts on offer as Brexit and stamp duty jitters make now the time to buy

Summer sales are in full swing and its not only bikinis and bistro sets being sold off at knock-down prices. New homes are quietly having tens, sometimes hundreds, of thousands of pounds slashed from asking prices.

In a market where buyers are nervously awaiting the final details of Britain’s exit deal with Europe, everyone from major housebuilders to housing associations, small boutique developers to would-be flippers are discounting to shift flats across London.

“There is a lot of stock on the market, and there is not a lot of consumer confidence,” says Ben Morris, head of new homes at Colliers International.

“In the run-up to any political milestone — and this is the biggest one for generations — there is an inevitable tendency for buyers to sit on their hands. It means this is a great time to be buying.”

GREAT BUYS IN BOW

In Bow, for example, two-bedroom flats at St Paul’s Square are on sale for £459,000. This time last year, two-bedroom flats at the site were being advertised at £525,000.

To add to the appeal developer Countryside is also offering to pay stamp duty for first-time buyers, worth £7,500, plus a £1,500 contribution towards legal fees.

The development, which is almost sold out, sits beside Mile End Park, with both Bow Road and Mile End Tube stations, in Zone 2 and between them served by the Central, District, and Hammersmith & City lines, within half a mile.

Visit countryside-properties.co.uk for more details.

ELEPHANT & CASTLE

Meanwhile at the £2 billion Elephant Park development in Elephant & Castle, an investor who bought a small portfolio of flats in its second phase, West Grove, two years ago is now hoping to sell up.

Studio flats have been cut by more than £50,000 from £550,000 to £499,000, while one-bedroom flats are down from £699,950 to £650,000 and two-bedroom flats are down from £995,000 to £925,000 — a massive £70,000 off.

Visit jackson-stops.com for more information.

WHY ARE DEVELOPERS REDUCING PRICES AND OFFERING 'DEALS'?
Of course, just because something has been cut in price doesn’t automatically make it a bargain.

Prices in prime central London have fallen about 10 per cent since 2014, and the rest of the capital has joined the decline over the last couple of years.

Ben Babington, director of residential development at estate agents Jackson-Stops, says a discount is often simply a sign that a developer or owner is chasing the market downwards.

“It does depend how overly optimistic the developer was in the first place,” he explains. “In a rising market it is very easy to push up your prices and people will still come and have a look and make an offer.”

The other issue is an oversupply of new homes. Right now, according to Rightmove, there are more than 7,000 for sale in the capital, with tens of thousands more in the pipeline.

“Now stock levels are pretty much at an all-time high,” says Babington, which means that with buyers slow to commit, developers must price keenly to sell.

DO YOUR RESEARCH

Finding these discounts isn’t always easy as many large housebuilders are a little bit bashful about admitting they are having difficulties selling.

As well as speaking to agents and keeping a close eye on property websites, smart buyers looking for a discount should research the financial accounting timetable of the developer behind their chosen scheme.

“You get the best discounts when a company’s full-year accounts are due,” says Babington. “They are going to have to report their accounts and the pressure is on to make sales.”

Another good time to cut a deal is when a development is on the cusp of completion. “Some developers are required by their funding partners to achieve a certain number of pre-sales,” adds Babington.

Equally when a development is close to having sold out developers will be keen to cash in and move on and might bring prices down, although sometimes the last homes in a development have been left on the shelf for a reason — awkward layout, possibly, or a miserable view — and might therefore not be worth buying.

BIG PROPERTY, BIGGER BARGAIN

Interestingly, buyers looking for larger properties are particularly in luck. Over the past few years developers have been under pressure from council planners to include a significant proportion of “family-size” units in their schemes to aid London’s chronic shortage of family homes. However, families do not seem to have warmed to the European model of bringing up children in flats, preferring to move to the home counties and commute if they cannot afford a London house.

As a result larger flats are often left languishing. But they are ideal for live/work owners or those who can get a lodger in to help cover costs.

At Feature 17 in Walthamstow, near the world-class William Morris Gallery and Europe’s largest urban wetland park, and with quick transport links to the City, three-bedroom flats have been reduced from £565,000 to £550,000. Visit countryside-properties.co.uk.

CATCH THEM ON THE FLIP SIDE

“Flippers” — investors who gambled on reserving a new home off-plan with the intention of selling it on before it is ready to move into for a profit (a practice officially known as contract reassignment) — will also be getting twitchy as a development comes closer to completion.

When their flat is ready they will either have to pay for it or forfeit their deposit. And with falling prices they might struggle to find a lender willing to offer a mortgage on a property worth less now than it was bought for. “They will likely just want to cut their losses,” says Babington.

At Wing, a development in Camberwell due to complete next month, an owner is doing just that. The one-bedroom flat with two private patio gardens has just been reduced from £415,000 to £395,000.

It’s close to Camberwell Green, Burgess Park, and Kennington Park, and handy for both Oval station on the Northern line in Zone 2 and Denmark Hill for National Rail. Visit colliers.com/en-gb/uk for details.

DISCOUNTS FOR DEEP POCKETS
Discounting is affecting the whole new-build market from the very top down. In Bayswater the lavish flats at Leinster Square, just four properties within a lovely Grade II-listed white stucco building north of Hyde Park, have had substantial price cuts to attract high-rolling buyers. The three-bedroom show home is down £550,000 to £5.95 million from £6.5 million (leinstersquarew2.com).

Charlie Baxter, managing director of developer Alchemi Group, says the high prices asked in the recent past are not available. “Brexit, stamp duty hikes and global political uncertainty have all contributed to the slowdown.”

At 22 Buckingham Gate, another boutique development, moments from Buckingham Palace, prices on the final pair of two-bedroom homes have been cut from £2.8 million and £2.65 million to £2.4 million. Visit 22buckingham gate.com or jackson-stops.com for more details.

Buyers might be saving but they should remember that over the next few years they are unlikely to see significant price rises. The days of “earning” enough to keep on moving up the property ladder have gone — for now at least.

But experts say it is still sensible to buy if you are “throwing money away” on rent because you can take advantage of relatively cheap mortgage costs and stamp duty.