Global property consultancy Knight Frank released its Q3 2023 Land Index and Housebuilder Survey, which highlights that in response to tough housing market conditions in the UK, almost 60% of surveyed housebuilders are providing non-cash incentives.
According to the report, among respondents, 59% are offering items like carpets or white goods, over 40% contribute to legal fees or stamp duty, and nearly a quarter provide deposit contributions. Additionally, 16% are giving cashbacks or mortgage subsidies.
The major challenges faced by the sector in Q3 include planning delays (80% of respondents), concerns about land availability, mortgage availability, and cost (all at 47%). About 36% of respondents express worries about buyer sentiment and the UK economic outlook.
According to Charlie Hart, Partner at Knight Frank, “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 a government that understands the genuine challenges facing the market. The industry is looking for positive policy direction in the autumn statement.”
In total, 48% of housebuilders anticipate a decline in average land values in the last quarter of the year compared to Q3. Another 48% believe they will remain unchanged, according to the latest survey of 54 volume and SME housebuilders by Knight Frank. Only 5% predict an increase.
Anna Ward, Associate in the Residential Research team at Knight Frank, said that,”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.”