Will I get a £600k house for £500k

[caravantulips]

Suddenly find myself looking for a house for the first time. (Long story but I’ve never looked or bought before). There’s a new build advertised as £595 guide price. Am I totally naive in thinking that the price could be brought down if they do don’t all the finishing hi spec bits. Plus slow market at the moment (I have no idea - is it slow? Just thought might be with the news etc.). £500k is my absolute max budget. Am I wasting time even thinking it’s an option?

So nobody notices the unsold stock and posts on the internet about getting 100k discounts? How does it work in reality?

I have no idea whether they notice them or not. People noticing things online doesn’t dictate how a house builder sells their stock no. There are far more influencing factors than the potential customer.

Partly due to sellers cutting their asking prices I suspect.

https://www.msn.com/en-gb/money/other/new-build-prices-plummet-average-listing-in-east-midlands-is-43-000-lower-than-a-year-ago/ar-AA1KMY0Y

If you recently over-paid for a new-build and are sitting down to your dinner next door to unsold stock, you will notice, the potential buyer notices because the bank won"t give them the loan anymore, that is what the stamp duty holiday and help to borrow schemes were about, bailing out developers.

Yes. So if you were a developer would you be slashing £100k everytime a buyer asked or would you wait until the government gave you cash to make up the difference?

The government will be nailed to the wall by the bond market if they try any of their previous developer propping stunts again, the world really has changed in a very short space of time, the UK is very vulnerable to the bond markets now.

The government didn"t actually give them the cash, they engineered sentiment (and the public fell for it) so that people would actually BORROW the money to bail out developers, the banks got to lend as well so win win!

it doesn’t matter. The point is the developers aren’t the ones who take the loss.

Reductions do happen- in 15 years of development I hadn’t seen one as much as £100k inc the 2008 crash- however they do happen- most frequently on the last few plots so the developer can exit. But they don’t hysterically stay slashing prices because they buyer has seen an article on the internet, no.

For the last 15 years the reason for no reductions is quite obvious, a gullible public were lapping up the cheap debt and overlooking the shoddy building work because the monthly payments seemed low, recently the rates went up and the public woke up.

www.propertyinvestmentproject.co.uk/property-statistics/uk-interest-rate-history-graph/

There is no need to post links I won’t read them. You clearly know nothing about the Resi actual business, which no, doesn’t run the way you think it does

How does it run?

I’ve explained to you. There are multiple internal and external factors that determine any pricing decision. Anyone that has been exposed to corporate pricing would be aware of this.
House builders are not individuals desperate to sell their individual houses, they have scale and resource to fall back on. The have risk built into the product.
They have decades of expert market experience and forecasting. You have no idea what motivated a house builder to discount or not, unless you were actually present for the decision. So stop guessing.

Best not to max yourself out with a mortgage- go for something a bit less so you have some wiggle room and less stress affording to life. I don’t see anything in life getting any cheaper

"They have decades of expert market experience and forecasting"

People said that about the banks before the sub-prime pop, and about the "smart" money before commercial property went bang. You know and I know that they were just riding a cheap credit wave, they didn"t see interest rate rises coming, they didn"t see the depth of feeling about immigration coming and they didn"t see the public waking up to the fact that 30 years debt for a rabbit hutch next to a roundabout just isn"t worth it.

I can see property getting cheaper.

Developers have been lobbying for bailouts for a while now. They obviously know that sales haven't been going well in at least some areas. I hope the government doesn't bail as developers are a private business, not a public service. Frankly, the government(s) are likely to have much bigger things to bail out at some point.
Wrt to cutting prices, I've seen a lot of reductions in the last couple of years. Whether they have actually made a loss rather than simply less of a profit, I have no idea.

How would it be insured?

Property yes but everything else no. If you get the absolute maximum mortgage you can afford then you’re likely going to be stuck struggling to pay bills that keep going up. Regardless of the price you pay….

Fair point.

https://www.theguardian.com/business/live/2026/mar/16/uk-mortgage-shelf-life-nosedives-interest-rates-oil-iran-inflation-news-updates

Very difficult to see how they would manage a bailout at this stage, they really need sentiment on their side to do it, in the HTB/SO era people were gagging for the loans, I don"t think that is the case now.

I find myself thinking, surely developers would rather hang on to unsold stock (for a time length determined by factors including the cost of effectively mothballing part of an estate they are building), in the hope it will go up again in a year or two, rather than sell at a loss - a loss that could then impact all of the unsold stock in that area? Not my field at all, but if I had say £10m tied up in a development of 40 houses, which I hoped to sell for a total of £20m, then selling one at a knockdown price could lead to the whole development being worth less as no one would want to pay more than that low price, which would impact the worth of the development on my balance sheet, which could influence my ability to access cheap finance etc. I assume there are various tipping points that will affect the decision, and they wouldn’t hang on to unsold properties forever, but I wouldn’t expect heavy reductions for a fair old while, and only then for the last few properties.

I’d actually be interested in what anyone in the industry can say about it, and how it works! I know that my company doesn’t like too much risk, and exposure to potential long term costs can affect our S&P rating and thus access to credit etc.

I work in the industry and your thinking is broadly right. There are many factors that come into play when making a pricing decision

That assumes that value will never increase. A balance sheet asset is a balance sheet asset. Profit or loss crystallises on sales.

One of my friends lives in a house she viewed initially to buy - a new build. It was one of 4 new houses and the developer could only sell one near the marketing price (£1.4m). Chose to rent the other 3 out (1 to my friend) rather than sell at whatever price they could get. One of them’s back on the market now at £1.2m.

So the price dropped?