If they have a 5% deposit, then deposit boost works well where we give an additional 5% so that they can secure a 90% loan-to-value mortgage," said a sales director with Persimmon.
Some homebuyers are opting for exchange options, where the builder purchases the buyer's existing property and the payment helps fund the new-home purchase.
"Mortgage holidays", offered by Persimmon and other builders, are also popular among homebuyers with builders contributing towards home-loan payment during a specific period.
Reuters GraphicsKNOCK ON MARGINSThe incentives, while aimed at boosting demand, come at a cost for homebuilders struggling to keep costs low.
Persimmon said last month sales incentives and marketing costs shaved off 2.1% from its half-year gross margins.
Persons:
Toby Melville, Barratt, Persimmon, Aynsley Lammin, Peel Hunt, Sam Cullen, Cullen, Taylor, Aby Jose Koilparambil, Sweta Singh, Saumyadeb
Organizations:
REUTERS, British, Reuters Graphics, Bank of England, Reuters, Peel, Thomson
Locations:
Bristol, Britain, British, Bengaluru