Buying Off-plan: What You Need to Know 

What is an Off-Plan Property? 

Buying a home off-plan means that you purchase the property before it has been completed. These types of property are usually sold before construction begins and can be at a more affordable price than their prebuilt counterparts. You can usually purchase an off-plan property with a smaller deposit, especially if you’re using Help to Buy. This makes buying off plan an attractive option for first-time buyers.

Is It Good to Buy Property Off Plan? 

One of the biggest advantages of buying a house off plan is that your new home could be worth considerably more than what you paid for it when you move in. With some developers, you can personalise your home with new fixtures, fittings, and interior décor before it’s even built. This level of customisation is a significant benefit of choosing a new build.

Additionally, buying off plan can allow you to avoid paying stamp duty on certain properties, depending on their value, saving you money on your investment.

Why Do Developers Sell Off Plan? 

Developers sell off plan properties to secure funding for the project and gauge market interest. Selling homes before they are built provides developers with essential capital to complete the construction, reducing their financial risk. This often results in discounts for buyers who choose to invest in a property off plan early in the development phase.

What Are the Risks of Off Plan Properties? 

As with any investment, there are risks associated with buying a house off plan. Here are some considerations:

• Property Value: There’s a chance the market may fluctuate, impacting the final value of your off-plan property.

• Developer Reliability: It’s crucial to research the developer’s history to ensure they deliver quality projects on time.

• Completion Delays: Delays in construction can impact your moving timeline and any mortgage agreements you have in place. 

What Do I Need to Do When Buying Off Plan? 

Here is a list of things to consider when buying a new home off-plan:

Location 

When finding the perfect location to buy your property, we recommend looking for the development first and then selecting the appropriate home of your choice. Off plan properties for sale are often in up-and-coming areas with potential for growth, making them a smart investment.

There are a vast variety of new, residential developments that have many reasons why you should invest in them. Other things you will need to think about regarding the location of a property include: 

• Local Amenities 
• Job Opportunities 
• Local Community 
• Ofsted reports for local Schools 
• Traffic 
• Noise Pollution 

Research the Developer 

It’s incredibly important to know about the developer when buying off-plan. Take a look at their portfolio of previous builds to give you an idea of the quality of the build. You could also visit the developer’s other sites to see how they look and get a feel of what you are investing in. 

Equity Growth 

Looking at the equity growth (or capital growth) will help you see if the investment is worth it or not. If the home was purchased in 2018, but it isn’t due for completion until 2020, you would have seen the value of the property grow if the area had a strong capital growth. This is why off plan property investment can be a lucrative choice. 

Staged Payments 

When it comes to buying a home off-plan, you will need to negotiate the price (if doing so) upfront and pay a small reservation fee. This will allow you to make payments throughout the building process until it’s completed. By having staged payments, you will be able to manage and budget your property investment better. 

Here’s a much shorter version of the What Are the Best Places to Buy Off-Plan Property? section:

What Are the Best Places to Buy Off-Plan Property? 

When choosing the best location for an off-plan property investment, focus on areas with strong growth potential and demand. Here are some key considerations: 

• Emerging Urban Areas: Look for areas undergoing regeneration or with new infrastructure projects that promise future growth. 
• Well-Connected Locations: Proximity to transport hubs and major cities ensures good accessibility and long-term value. 
• Green Spaces: Areas with parks and outdoor spaces are popular for families and offer a high quality of life. 
• Up-and-Coming Suburbs: Suburban areas with affordable prices and good transport links to city centres are ideal for buying off plan. 
• University Towns: Locations near universities or business districts attract steady demand for rental and purchase properties. 

These areas offer great potential for capital growth and are excellent choices for buying a new off-plan property.

Mortgages for Off Plan Properties 

Before you think about investing in off-plan properties, it’s important to speak to a financial adviser. In most cases, you will not be able to get a mortgage offer until 6 months before the completion date (depending on which lender you use). A good financial adviser will be able to help you see how much can be borrowed, and when you can start the formal application process for your off-plan property. 

Questions to Ask Your Off-Plan Developer 

To ensure your investment is sound, consider asking your developer the following: 

• What is the expected completion date? 
• Are there any warranties or guarantees included? 
• What happens if there are construction delays? 
• Can you provide references from previous developments? 
• Will there be any opportunities to customise the property? 

Buying an off-plan property can be a smart investment if you choose the right location. By focusing on areas with strong growth potential, good transport links, and desirable amenities, you can maximise both the value of your investment and your quality of life. Whether you’re looking for a new build in an up-and-coming suburb or a modern home near city centres, off-plan properties offer a range of opportunities for savvy buyers.