Last edited 13 Aug 2018

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HopwoodHouse Other Consultant Website

A guide to investing in off-plan property in the UK

Contents

[edit] Introduction

Buying a property off-plan means purchasing the property before it has been built. This can be a risky move, but it can also be very rewarding, especially where property prices are increasing.

Buying off-plan can be complex, but with more schemes being developed to help people buy such properties, it is becoming much more common across the UK.

[edit] The off-plan buying process

The buying process for off-plan property can be slightly different to what some people may be used to, so it is important to understand the process before making a decision to purchase off-plan. The process is as follows:

  1. Research different developments and consult a mortgage advisor to discuss your own personal circumstances and how they may impact your investment.
  2. Pay a reservation fee to reserve your property.
  3. Arrange for the legal elements of your property purchase to be handled by a professional conveyancer.
  4. Get a mortgage put into place for your property (should you need one) by searching for the right product and discussing your circumstances with experts, in order to find the best solution for you.
  5. Complete all paperwork and signatures, exchange contracts with the seller and make payment of the deposit.
  6. Ensure that a snagging survey is conducted close to the completion date, so that you can be sure that there are no issues to worry about.
  7. Be ready for when the project is officially completed. The short stop date would detail the expected date of completion, whilst the long stop date would detail the date which the project has to be completed by.

[edit] Off-plan property advantages

  • A developer is likely to deal with the property transaction in-house, making the whole process less complex than some may imagine.
  • Some developers ensure that a management company is in place before the transaction, meaning that the management and maintenance of the property, as well as the sourcing of tenants, may already be taken care of.
  • The purchase price is likely to be lower than similar existing properties on the market, due to the fact that the developer is the only other party involved in the process.
  • It is likely that the value of the property will increase from the initial purchase.
  • Off-plan properties are brand new, meaning that no additional work should need to be done before renting or occupying the property. Some developers even offer furniture packs to make the whole process even quicker.

[edit] Off-plan property disadvantages

  • As off-plan properties are purchased whilst in construction, they are often delayed.
  • It can be difficult to secure a mortgage for an off-plan property, and it is likely that there will need to be cash in reserve.
  • The biggest risk for off-plan properties, despite being very rare, is that the development company become bankrupt and are unable to complete the project. To minimise the risk of this, work with a trusted company that has years of experience.

--HopwoodHouse 12:41, 31 May 2018 (BST)

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