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Making the right offer on a new build house is essential so that you don’t overpay. We look at how much you can negotiate off a new build house and how to go about it in 2024.
Yes. You can, and should, make an offer when buying a new build house. New build developers will be as open to negotiation as any other home seller. But how do you go about it? Here’s how to negotiate a new build house price.
New build home buyers negotiate a typical discount of 14% off the price, research by property tech company Unlatch found. But don’t get hung up on averages because the amount you’ll be able to negotiate will depend on a number of factors. So it’s vital to do your own research first – read on to find out what to do.
The average price of a new build in the UK increased by 17.2% in the 12 months to November 2023 to £413,032, according to Office for National Statistics data. By comparison, the average price for existing homes fell by 2.4% to £282,440 over the same period.
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When you’re making an offer on a new build house, here’s what you need to find out first.
When buying a new build house, you’ll pay a premium for it being ‘brand new’. But you’ll still want to avoid paying an over-inflated price. To calculate the new build premium you’ll be paying, you’ll need to compare the price of the property to similar new build properties in the area.
Check the price per square foot and compare it to the resale market as well so you understand the extent of the new build premium you are paying. You can also check Land Registry for actual sold prices of similar developments in the area if you know the postcode For more advice read Buying a new build: Essential guide.
Looking at the wider picture of what’s demand like for new build homes so far in 2024, EasyMoney’s New-build Sector Review Q1 2024 of new-build homes listed for sale across Britain’s major cities reported a slight annual decline of -0.1%. It also found stock levels had fallen by -0.5%.
But you’ll need to assess what demand is like near you. If you are buying on a new build estate or bigger development, take a look at what other properties on the development are being sold for using Zoopla and Rightmove. Consider how many properties there are in the development and how long they’ve been marketed for. Also, look at other similar developments nearby to see how much similar houses are selling for.
All of this information will give you the confidence in how to negotiate a new build house price. It may be that similar properties are selling for tens of thousands of pounds cheaper – so start with a similar discounted offer. The worst that can happen is that they say no, but at least you have a starting point.
When negotiating on a new build, timing is key. Picking the right moment could vastly increase your chances of getting a deal:
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When you’re looking at how to negotiate a new build house price, you should focus on the price you are paying for the property. Once you’ve got this agreed, look at what other extras developers often use to entice buyers.
In late 2023, when mortgage rates were rising and demand for new builds falling, Barratt, the UK’s largest house builder, said its incentives were running at 5%-6% of the house price versus 1%-2% the previous year, while Persimmon noted that it was using incentives at around 3.2% per plot.
Here are some of the most common new build incentives:
Some developers will offer to pay stamp duty on a new build as an incentive for you to buy. But remember, if you are a first-time buyer in England or Northern Ireland you don’t have to pay any stamp duty on properties priced at up to £425,000. And if your new home is worth £425,001 to £625,000 you’ll pay 5% stamp duty, but only on the value above £425,000. So before you agree to this, work out how much stamp duty you would pay on the property to check you are getting a good deal. Find out more about stamp duty and how much it is likely to cost.
When you’re looking at how to negotiate a new build house price, you could also negotiate a higher quality specification of finish. Perhaps you could get higher quality kitchen units, with better branded white goods and higher quality flooring. Ask for these early on in the process and try to get as much as possible included when you haggle. Remember to get anything agreed in writing in your specification and contract. Don’t be fooled into taking a freebie that you didn’t want in the first place. For example, having furnishings thrown in only works if you like what’s on offer and you couldn’t buy it cheaper yourself.
If you are buying a property that has yet to be built make sure you read our guide to buying off-plan.
In recent years we’ve heard of developers offering a free Tesla, a free modular kitchen, thousands of pounds towards a holiday, free car parking space, annual travel card and cash contributions to the deposit. Many developers offer incentives, so look around a number of estates to see what other developers offer. You could ask your developer to match the offer of another development you’re considering. This is a good time to also compare the quality of the different developments and choose the best builder.
Firstly, it could be argued free extras and incentives are just masking high asking prices. Don’t be lured in and be sure you’ve weighed up the other pros and cons we list in this guide. Can you get a similar sized property at a much cheaper price in the same location if you choose an older home?
Secondly, be aware that incentives offered by the developer over about 5% of the value of the property may impact how much your mortgage provider will lend. So speak to your mortgage broker about any incentives agreed as early as possible
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
If your developer offers to pay your legal fees, make sure this doesn’t come with strings attached. Often the house builder will have an arrangement with a legal firm. But you should not feel obliged to use them. Shop around for the best legal firm. You need someone independent to fight your corner as explained in our guide “Do I have to use the developers solicitor“.
If you are successful and negotiate a reduced price, stamp duty payment, or optional extras thrown in, then well done! Now make sure that you get everything that has been agreed in writing. When you appoint a solicitor explain to them what you negotiated and show them the written evidence so they can make sure it is written into the contract.
There are 30 local authorities in the UK where the average price of a new build is lower than the average price of a resale property, according to research by Zoopla.
The best 10 locations with the best value new build homes
| Local authority | Median price of a 3-bed new-build home | Median price of a 3-bed resale home | Price difference |
| Winchester | £431,500 | £550,000 | -£118,500 |
| New Forest | £440,000 | £485,000 | -£45,000 |
| Coventry | £206,300 | £242,500 | -£36,200 |
| Chichester | £400,000 | £435,000 | -£35,000 |
| East Lindsey | £224,000 | £250,000 | -£26,000 |
| Derbyshire Dales | £300,000 | £325,000 | -£25,000 |
| South Hams | £350,000 | £375,000 | -£25,000 |
| Canterbury | £375,000 | £400,000 | -£25,000 |
| Worthing | £425,000 | £450,000 | -£25,000 |
| South Oxfordshire | £450,000 | £475,000 | -£25,000 |
Homes listed for sale on Zoopla between November 2023 and January 2024
Yes they do. So do your research, bearing in mind some of the things we say in this guide, and then pitching a lower offer. There’s nothing to lose in doing so.
Yes. You’ll need a conveyancing solicitor to deal with the legal process of purchasing your new build. New build conveyancing is often more complex than buying an existing home. And while developers may offer you discounted or free conveyancing with their partner, you should always shop around to get the best deal. And don’t feel pressured by your developer to use their provider. There are ample reasons why this might be a bad idea – read our guide on “Do I have to use my developer’s solicitor?“
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