Housebuilders are now selling their new homes at dramatically reduced prices. If ever there was a green light to go out and buy, it is the whopping rate reduction of 1.5 per cent.

With no incentive to save in banks, now is the time to take it out immediately and put it into bricks and mortar.

Housebuilders are offering the sort of price reductions that are just too good to resist.

Affordability is easing across the board - petrol is cheaper, food and clothes are a bargain.

A further 2.2 per cent fall in average house prices in October this year means the ratio of prices to earnings is down from its peak in July 2007. At that time, the average price was £200,000; it is now £168,000, a drop of 16 per cent, the same as in October 2005. All the signs are that it is now time to buy.

‘For businesslike buyers in a position to proceed, this could be the best time in a generation to pick up a genuine bargain’

With new-home sales at a 50-year low, housebuilders are desperate to move stock. Reductions of up to 30 per cent are commonly available in London and the South-East, while in the Midlands and some northern cities much heftier discounts are being negotiated on individual sales.

For businesslike buyers who are in a position to proceed, this could prove to be the best time in a generation to pick up a genuine property bargain, a home with a high spec, built on the assumption that the builder would get the money back for the highly styled interior.

Some beleaguered developers are so keen to shift unsold stock that they are resorting to the equivalent of Blue Cross Days, the high-street tactic of offering “further reductions”.

Taylor Wimpey is promoting “one day only, change your life” deals across the Home Counties. “Selected properties will be available at reduced prices only for the day of the promotion and will revert to their original prices the following day,” explains a spokeswoman.

At The Edge in Edgware, Bryant Homes is offering a special half-price deal to first-time buyers who have a minimum five per cent deposit: a £180,000 one-bedroom apartment has been cut to £89,975. At Campbell Square in Milton Keynes, a two-bedroom apartment costing £174,950 now costs £92,475.

The virtual shutdown in the mortgage and credit markets has brought the housebuilding sector to its knees over the past few months. For volume housebuilders, the crisis is deepening.

Profits and share prices have plunged, land in many cases appears worthless, and with no income stream from ongoing sales, builders are in danger of breaching their banking arrangements, which could lead to them going bust. There is even talk of a government bailout, with housing associations mopping up unsold homes for much-needed social housing.

Source - homesandproperty