Developers resist new-build price cuts on homes not selling

Landlords considering new-build home purchases are finding developers reluctant to cut asking prices, even when the properties remain unsold for months.

Octane Capital found that 25% of new-build homes had been advertised for longer than three months.

Its analysis covered a representative sample of more than 1,100 live listings across England.

One in eight properties had spent more than six months on the market, while 4% had been available for more than a year.

Developers avoid discounts

Jonathan Samuels, the firm’s chief executive, said: “The immediate assumption is often that if new-build homes aren’t selling quickly, developers will simply reduce prices, but in reality, that’s often the last option they want to consider.

“Every discount comes straight off the bottom line and, after several years of planning, construction and rising build costs, protecting profitability has become more important than ever.”

He added: “Many developers would rather give themselves additional time to sell than unnecessarily erode the value of a scheme, particularly where market conditions remain relatively stable and buyer demand is still there.

“That’s why developer exit finance has become increasingly important.”

Thousands remain unsold

Applying the findings to the estimated 34,831 new-build homes for sale across England suggests around 4,400 have been on the market for more than six months.

Despite the longer selling periods, only 14.5% of available properties had seen the asking price reduced.

Developers are instead allowing homes more time to sell rather than accepting offers that could reduce scheme profitability.

That approach also leaves capital tied up in completed developments for longer, delaying its use on future projects.