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From stamp duty to annual travelcards: are new-build home incentives worthwhile?

Get to grips with the 'freebies' offered by developers on new homes

Eager homebuyers are being offered a range of incentives by developers, with everything from free furnishing packages to travelcards becoming increasingly common. 

But should you be drawn in by the freebies, or are they just masking high asking prices on expensive new-build homes?

Here, we take a look at the various incentives currently available on new developments, and assess whether they’re really worth your while.

  • If you’re buying a home and would like some advice on your mortgage options, call Which? Mortgage Advisers on 0800 197 8461.


£40,000 house-price discount and a travelcard

Stratford in East London is best known for the 2012 Olympics, but it’s also home to one of the biggest regeneration projects in the UK, with around 3,000 new homes set to be built between now and 2030.

At its Legacy Wharf development near the Olympic Park, Bellway is luring buyers with the promise of price cuts of up to £40,000 and a free annual London travelcard, worth £1,658.

Even with the discount, however, you’ll need deep pockets to buy at Legacy Wharf – where a three-bedroom apartment costs £549,995.

If you have a smaller budget, equivalent properties in the same area are currently available on Rightmove with asking prices from £400,000 – though they’re resales, not brand new.

  • Price of property: £549,995 (including £40,000 discount)
  • Equivalent price of resale property: £400,000+
Legacy Wharf by Bellway (Source: Bellway)

Same house price, but stamp duty, legal fees and soft furnishing paid

The popular commuter town of Leighton Buzzard in Bedfordshire is ideally situated for people working in London, with more than 60 trains a day running to Euston.

Just outside the town, you can buy a property at Catalyst’s Rutherford Fields development. Some plots here come with a range of incentives, including paid-for stamp duty and legal fees, as well as a soft furnishings package consisting of curtains and blinds.

Prices are relatively reasonable, too. Three-bedroom properties at Rutherford Fields are priced from £340,000, compared with £250,000 to £385,000 for equivalent resale homes nearby.

  • Price of property: £340,000
  • Equivalent price of resale property: £250,000-£385,000.
CGI of Rutherford Fields (Source: Catalyst)

£20,000 house-price discount, light fittings and turf

CALA Homes offers an array of incentives at its developments, including Shopwyke Lakes in Chichester, West Sussex.

If you choose to purchase the five-bedroom ‘Wittering’ property (priced at £675,000), you can benefit from £20,000 off (already included in the stated price), free carpets throughout and a turfed rear garden.

If you’re thinking that £675,000 sounds a bit expensive, you might be correct. Five-bedroom properties for re-sale within a mile of the development are listed on Rightmove with asking prices between £425,000 to £650,000.

  • Price of property: £675,000 (including £20,000 discount)
  • Equivalent price of resale property: £425,000-£650,000
The Wittering, Shopwyke Lakes (Source: CALA homes)

Appliance upgrades, new floors and a moving contribution

Barratt Homes, the UK’s largest housebuilder, proudly advertises its freebies across its online listings.

The incentives offered by Barratt vary significantly from one development to another, though stamp duty cuts and part exchange deals are common.

On selected plots at its Wigston Meadows development in Leicestershire, Barratt offers an upgraded kitchen with integrated appliances (worth £3,800), flooring (£4,200) and £2,000 towards your moving costs.

On the ‘Alderney’ house type, that equates to £10,000 worth of incentives on a four-bedroom home priced at £369,995.

This price, however, is right at the top end of the local market, where four-bedroom resale properties are available with asking prices of £285,000 to £370,000.

  • Price of property: £369,995
  • Equivalent price of resale property: £285,000-£370,000
CGI of the Alderney at Wigston Meadows (Source: Barratt Homes)

Rent paid for three months

Shared ownership schemes – where you buy part of a home and pay rent on the rest – can offer a way on to the property ladder for cash-strapped first-time buyers, especially in London and the South East of England.

The downside, however, is that the cumulative cost of the mortgage on the share you’ve bought, the rent on the share you don’t own, and the annual service charge can become very expensive.

This has led developers to offer incentives on shared ownership plots.

The housing association Notting Hill Genesis will pay the rent on its share of the property for the first three months when you buy a home at its Aspire N13 development in Enfield. The minimum share you can buy is 25% for £98,125.

Aspire N13 by Notting Hill Genesis. (Source: sharetobuy.com)

Are new-build incentives worthwhile?

Upgraded furnishings and annual travelcards are ‘nice to have’ freebies, but bear in mind that such incentives are being promoted as a way of luring you in to buying a property, and may sometimes be over-valued.

There are only a couple of instances where incentives should factor into your thinking.

Stamp duty

Paying your stamp duty bill is arguably the most common incentive developers offer, and its usefulness depends on the property you’re buying and whether you’re a first-time buyer or not.

If you’re buying your first home, you don’t need to pay stamp duty on the first £300,000 – so the incentive wouldn’t be necessary on many properties.

On a more expensive property, however, you could make a big saving, meaning a stamp duty incentive might be worth considering. On a £500,000 home in England, the stamp duty bill would be £10,000 for a first-time buyer, or a whopping £15,000 for an existing homeowner.

Part exchange

Some of the largest developers in the UK offer part exchange incentives, where they’ll agree to buy your existing home, leaving you chain-free and able to move into one of their new-build properties more quickly.

The most important thing to note here is that there’s no guarantee you’ll get the same price you’d achieve on the open market for your property, regardless of whether the developer says it’s had several valuations undertaken by local estate agents.

Part exchange can be useful in a slow market where you’re struggling to sell but, as with trading in a car or phone, you’ll pay a price for the convenience – so you’ll need to do your own research and be prepared to negotiate.

Should you buy a new-build home?

You might have noticed that some of the new-build developments discussed earlier are priced at the very top end of their local market.

It’s true that new-build homes come at a price premium. Developers argue the extra cost is justified by owning a brand-new property, as well as the quality of build, furnishings and energy efficiency.

Critics, however, say that builders are plumping up prices, and that homes are full of snagging issues – minor defects or omissions during the construction.

For some, being the first owners of a property may be worth the cost. But the prevalence of schemes such as Help to Buy and shared ownership mean first-time buyers might incorrectly think a new-build is their only option.

If you’re considering a new-build home, it’s vital that you’re aware that this industry isn’t tightly regulated, so you should question everything you see. Before you move in, it’s worth paying for a snagging survey to catch any issues with the build. Always do your research, ignore the marketing spiel, and don’t feel pressured to jump in.

  • Find out more: learn about the pros and cons of buying brand new in our guide on new-build homes.

Advice on your mortgage options

When buying a home, it can be helpful to take advice from a whole-of-market mortgage broker, who can find the right deal for you based on your circumstances.

To speak to an expert, call Which? Mortgage Advisers on 0800 197 8461 or fill in the form below for a free callback.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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