- Project plans
- Project activities
- Legislation and standards
- Industry context
- Specialist wikis
Last edited 19 Nov 2020
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.
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
- A guide to investing in off-plan property in the UK.
- Buyer-funded development.
- Hope value.
- Investment property.
- Project-based funding.
- Property development finance.
- Real estate investment trust.
- Residual valuation of land.
- Shared ownership.
- Speculative construction.
- Types of development.
- What is a mortgage?
Featured articles and news
Can XR technology be leveraged in design & construction?
Or are you capping.
Digital gaming competition for UK students aged 16 to 18.
Heritage protection in England vs Australia.
Three-quarters of fire doors fail inspections
The role of geoparks, biospheres and world heritage sites.
Just one month to go ! Find out more here.
A new gallery for the University of Huddersfield.
What will it take to stop it ?
To celebrate world bee day 2022 !
Not forgetting part F and the new part overheating part O.
As energy prices jump up in cost.
With people in the UK from Ukraine.
Industry leader Steve Murray takes on role.
An abundant and versatile building material.
600,000 heat pump installations targeted per year by 2028.
Helping prevent those unwanted outcomes.
How has transport changed due to Covid-19 ?
Will you need it ? after June 15 and the new Part O ?
Create an account and write the first of many articles.
CIAT commentary after the first meeting.
Who is to blame?
Research recommends focussing on portfolio success rather than project success.