Buyers’ incentives are not new and are often used in a buyers market. We’ve seen the UK property market slow to a near halt in recent months with house prices falling this month for the first time since 2010. It seems the traditional “autumn bounce” in the market is simply not happening this year with many waiting to see how Brexit plays out. So for those that are selling right now it’s no surprise that we’ve witnessed a rise in sellers and developers offering incentives to prevent their properties from languishing on the market for months on end. While one option to increase the likelihood of a sale in today’s market is to lower the asking price, offering an incentive can offer an alternative to increase the number of viewings and give the illusion of a better deal for the buyer.
Traditionally buyers’ incentives have included throwing in the curtains and any furniture built for the space or paying the stamp duty or solicitors fees. But it seems that developers are getting more creative with their incentives, particularly when it comes to trying to appeal to Millenials and Generation Z. While some of these incentives seem rather superficial, especially when compared to paying the stamp duty, what they do seem to do is reach the headlines thereby creating more interest in the properties. Here are just a few that I’ve come across recently:
Last year the Notting Hill Housing Group offered to cover the cost of a yearly TFL travel card if contracts were exchanged within 4 weeks on apartments in their Traders Quarter development. This sort of incentive doesn’t necessarily encourage someone to buy a home but once they’ve chosen to put an offer in it does serve to incentivise a speedy completion therefore decreasing the likelihood of the sale falling through. In the UK around 50% of all house sales fall through before completion with the most common cause being the buyer changing their mind.
Recently, the Manhattan Plaza development in Canary Wharf was offering buyers of the penthouses a holiday to New York, with first class flights, a 5* hotel and £10,000 of shopping and restaurant vouchers included. Buyers would also receive a one-year free subscription to bespoke concierge service Quintessentially. Buying a two-bedroom apartment in the same development would also come fully furnished and stamp duty paid for first time buyers. All the apartments in the development are now reserved so one could argue that the incentives have had the desired effect.
In Stratford’s New Garden Quarter the developer, Telford homes, is offering buyers a free interior design and furniture package as an incentive for its new duplex apartments and beyond London, in Aylesbury, first-time buyers are being offered a furniture pack worth £15,000 when buying a home at The Arc’s new 59-apartment development. These offers go quite a bit further than just leaving the curtains and built in wardrobes.
And while incentives are often offered on multi-unit developments there are cases where individual sellers also offer unusual or outlandish incentives. In 2010 I remember seeing that a seller in Malibu was offering his Ferrari F40 to the person that bought his $4m home. Not only did this story get international publicity I’m certain it also led to a sale. And while not in the initial offer, when George Hamilton bought an apartment from someone that runs a bakery he wrote into the purchase offer that the seller had to provide him with free cookies for a year. An unusual ask but the seller was happy to oblige.
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