A developer has stopped building upmarket homes in southeast England because they are becoming too difficult to sell. Other developers operating in the region are issuing profit warnings and offering a widening range of incentives to attract buyers. Developer Country & Metropolitan announced it had withdrawn from the premium housing sector in the south of England because there were too few buyers able to afford a home valued at GBP300,000 (HK$4.2 million) or more. Instead, it will concentrate on building homes in the GBP100,000 to GBP300,000 bracket. In April, another house builder, Countryside Properties, warned its profits would be hit by a downturn in the market for homes valued at GBP300,000 or more. At the other end of the spectrum, the north of England has become a hot spot for developers because demand for low to medium-priced homes there is strong. Developers are offering more incentives to attract buyers. Galliard Homes has extended its rental guarantee to five of its London developments: 98-118 Southwark Bridge Road, 74-108 Cheshire Street, E2, 548-550 Chiswick High Road, W4, South City Court 3 and 193-197 Long Lane. Under its scheme, investors are promised 6 per cent net income guaranteed for up to five years. As an added inducement, buyers need only place a GBP1,000 deposit on the properties, with the balance only having to be paid once they are completed in 18 to 42 months. Some developers are paying up to a 5 per cent deposit to help first-time buyers. Barratt and other developers are paying stamp duty for purchasers. Homes in many developments are fully furnished, complete with white goods. Barratt is also one of several developers looking at shared ownership schemes whereby the buyer only purchases part of the equity of the property and the developer retains the rest, with the buyer having the option to buy the rest at a later date. Robert Hadfield, analyst at landlords' website residentialinvestoralert.com said a growing number of new-build properties were becoming unaffordable to investors and first-time buyers. 'More developers have incentives now at most developments,' he said. 'They have their fingers on the pulse. When they start saying they are going to move north of Watford, then that is worth taking notice of. People who aren't using borrowed money are still buying, but there are not many of these people around.' London developers hope Hong Kong will remain a strong market. Rydon Homes will be marketing IKON at the Mandarin Oriental Hotel in Hong Kong from June 25 to 27. This is one of three buildings at its Nordic Apartments project on Cable Street in London's East End. Nineteen apartments are on offer at prices starting at GBP170,000 for one-bedroom homes to GBP215,000 for two-bedroom units. Completion is scheduled for September next year. The developer is offering to pay buyers' GBP500 legal costs if they go through one of their recommended lawyers attending the event. Mr Hadfield said the development, a five-minute train ride from London's Liverpool Street Station, was well located. 'It is very close to the city. It has got all the right attributes. I would not discourage people from buying there,' he said. IKON investors could expect 5 per cent to 6 per cent returns, he said.