Nearly 60% of housebuilders are offering non-cash items to incentivise buyers and kickstart the housing market, according to Knight Frank’s Q3 2023 Land Index & Housebuilder Survey.
The survey of 54 UK volume and SME housebuilders found 59% of respondents are offering items such as carpets or white goods, with more than 40% making contributions to legal fees or stamp duty and nearly a quarter offering deposit contribution. A further 16% said they were either offering cashbacks or mortgage subsidies.
Planning delays remain the biggest challenge for the sector (80% of respondents), followed by concerns about land availability and mortgage availability and cost (both at 47%).
Charlie Hart, partner at Knight Frank, said: “It’s interesting to see a significant increase in the number of housebuilders offering various incentives to attract buyers. This only emphasises the need for the industry to adapt and remain agile as the market evolves. It’s clear to see that they are doing all they can to generate sales, and throughout these challenging times, it’s now more important than ever to have government that understands the genuine challenges facing the market. The industry is looking for positive policy direction in the autumn statement.”
Just under half of housebuilders (48%) expect average land values will fall in the final quarter of the year compared with Q3, with another 48% predicting they will stay flat and 5% predicting an increase.
Anna Ward, associate in the residential research team at Knight Frank, said: “Mortgage availability and cost and buyer sentiment have risen up the agenda over the past year as key concerns in our survey. Several other headwinds are also limiting development from planning delays to high build costs. Looking ahead, the direction of the UK economy is likely to have the biggest impact on the housebuilding sector over the next few months.”
