- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 12 Apr 2018
The term ‘off-plan property’ refers to property which is available for purchase before it has been constructed. This is where the phrase ‘buying off-plan’ comes from; typically (but not always) relating to apartments.
Off-plan property is sometimes marketed to property speculators who purchase it with the aim of making capital gains by taking advantage of any discounts and selling into a rising market. In a rapidly-rising market, a buyer may even be able to sell the contract on, meaning they have the potential to earn a profit on the property before it is completed.
Off-plan property may also be desirable where an area is in high demand, and purchasers want to secure a future property.
Typically, a deposit of just 10-20% of the property’s value is required to secure an off-plan property. If purchasers then go on to occupy the property, they may be able to choose their preferred fixtures and fittings, etc.
However, there are some risks involved with buying off-plan property, mostly related to the inherent uncertainty of buying something that isn’t actually built at the time of purchase. For instance, the property might not increase in value to the extent that is expected, or at all. This could be to do with a change in market conditions, or due to the location being in an area with low or falling levels of investor demand. Political and policy conditions may have an impact, such as if a planned infrastructure development that would increase connectivity to an area, or a regeneration project, falls through.
There is also no certainty about the completion date for the property. Banks and building societies are increasingly willing to offer mortgage lending on off-plan properties but can stipulate that the property must be completed within a certain time-frame and may withdraw the offer if it is not.
For more information, see Reducing the risks of investing in off-plan property.
Off-plan property had come under criticism as a result of a number of developments that have been marketed and sold abroad before they are completed, and without being offered to the local market. This has left a number of developments in London that are sold, but have very low levels of occupancy, having been bought as a 'safe haven' investment, rather than to provide accommodation.
 Related articles on Designing Buildings Wiki
Featured articles and news
The Chartered Quality Institute explain the pathway to success for organisations implementing management systems.
An introductory article looking at where a duty of care can arise in the construction industry.
House of Lords committee encourages the use of off-site manufacturing in new report.
Computational fluid dynamics (CFD) can go some way to show the impact of new buildings on their surroundings.
The shortlist for the 2018 prize for the UK's best new building is revealed.
Amendment to Bill aims to provide councils with greater powers to increase tax premiums on empty homes.
As the latest summer blockbuster 'Skyscraper' is released, we look at some of the best uses of buildings in film.
Read our introductory article on how to layout a building.
New cross-party report calls for combustible cladding ban to be extended to all high-rise residential buildings.
Dr Nicholas Falk, director of the URBED Trust, explains why metro cities are the future of urbanisation.