What you MUST know before buying a new build home: I thought I’d got a good deal – but now I’ve discovered this hidden mortgage trap. I’m flabbergasted developers can do this. Don’t make my mistake

When 42-year-old Frazer Downes moved into his new-build home in September, he couldn’t have been happier.

He’d bought the house in Kidderminster, Worcestershire, for £350,000 – a fair price, or so he thought, for a detached home with three bedrooms and bathrooms in an attractive development.

So imagine his surprise a few weeks ago when he found out that developer Bovis Homes had slashed the price of identical homes on the same estate by £30,000.

He says: ‘We viewed it last May and I thought it was a really nice estate with lovely houses. We were really happy. Bovis Homes even paid my estate agency fees for selling my previous house.’

But when, while out walking his dog last month, he looked on the developer’s website out of curiosity, and found identical homes were going for £319,995.

‘I was flabbergasted,’ Frazer says: ‘We trusted the initial valuation.’ He was even more surprised as Bovis has a five-star rating from the Home Builders Federation, which means 90 per cent of its customers would recommend the company to a friend.

While it can feel unfair, there is nothing illegal in the price reduction. Frazer’s situation is a reminder of the difficulties facing home movers up and down the country who are navigating the current stagnant – and in some places falling – property market.

James Nightingall, of property search service HomeFinder AI, said that price cuts are more likely due to changes in the housing market based on local supply and demand, rather than sneaky sales tactics.

It’s no secret that the housing market is struggling with stagnating sales. The number of transactions fell 5 per cent from 99,710 in December to 94,680 in January, according to HM Revenue & Customs.

The new-build market in particular is feeling the pinch, with builders struggling to sell homes at the end of last year as supply outstripped demand. The average price of a new build has fallen in the past 12 months in many regions of the UK, estate agency group Propertymark says.

Some agents said developers were so desperate that they secured discounts as high as 17 per cent on new builds. Buyers may believe they must pay the price tag set by the developer, but you can – and should – negotiate.

Experts advise to look at what other properties on the estate have sold for on portals such as Rightmove and Zoopla, and check how long homes have been on the market to see if demand is low.

One of the best times to negotiate is if you are buying ‘off-plan’ – before a home is built, says the HomeOwners Alliance. Alternatively, if there are only a few left, you can typically snap up a discount as developers will be keen to wrap up the project.

Developers are also under pressure to meet sales targets when their financial year ends.

This is likely to be a different month for different firms. Find out by looking at their accounts on the Companies House website, and try to negotiate during that month.

Nightingall says: ‘Price changes on new-build developments, even for identical homes, are not uncommon and are typically driven by market conditions rather than individual transactions. Developers set pricing based on sales rates, funding requirements and broader demand.

‘Where activity slows, particularly toward the end of the year, incentives may be introduced to support sales.’

Frazer could also face another blow, as the fall in value may leave him stuck on higher mortgage rates when his fixed-term contract comes to an end.

David Hollingworth, of mortgage broker L&C, says: ‘If house prices have taken a turn then it could mean that the value of the property could be lower when you come to remortgage. In the worst-case scenario it could even leave the borrower in negative equity.’

Frazer, an accountant, is particularly annoyed because whatever happens he will also end up paying more interest on his mortgage than those paying a cheaper price.

For example, if he put down a £50,000 deposit on the £350,000 price, interest on the remainder over 25 years will total £200,000. But those paying £320,000 with the same deposit will end up paying back £20,000 less in interest, too, as well as the initial £30,000 saving.

Frazer made a formal complaint to Bovis Homes, which told him that there had been a change in market conditions.

The Vistry Group, which owns Bovis Homes, told The Mail on Sunday it regularly reviews pricing based on such variables as building costs, demand, sales strategies, including incentive schemes, and market conditions. It said that when Frazer bought his home, the price agreed was based on the circumstances at the time.