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UK developers offer sweeteners to home buyers

ANN/THE STRAITS TIMES – Britain’s house builders are throwing in freebies such as free cars and home loan contributions to lure buyers after surging borrowing costs sapped demand.

One in five new homes for sale at the end of October was advertised with sweeteners, according to data compiled by RBC Capital Markets and seen by Bloomberg News.

That is up from fewer than one in 10 over roughly the past decade, according to RBC estimates.

“In a hot market where homes are selling out, then no incentives will be required,” said RBC Capital Markets housing analyst Anthony Codling.

“They are used when the house builder is keen to accelerate the sales rate to sell the ‘last few remaining’ so that they can get off site and reduce costs.”

British households are facing a barrage of pressures triggered by pricey borrowing and a cost-of-living squeeze. That has led to a slump in first-time buyer sales as prospective home owners stay in rental properties rather than take on mortgages.

Home loan lending in Britain is set to record decade-low growth in 2023 and 2024, according to a report published yesterday by forecaster EY Item Club.

Hayfield Homes this summer offered prospective customers discounts up to the value of a GBP42,990 (USD72,000) Tesla car. The builder offered other incentives, including stamp duty contributions, moving costs and estate agency fees.