Things to consider when buying off-plan

What does buying off-plan mean?

Buying-off plan means purchasing a property before its construction is finished. Buyers will be able to view blueprints, floorplans and CGIs of the final build. Buyers can secure a property early, potentially for a lower price or with bonus incentives. However, the process does come with risks like construction delays or changes in the property market.How much do I need to pay?

When you buy off-plan, you first need to pay a reservation fee to secure the plot.

When you exchange contracts, you must pay the deposit. This is typically 10% of the purchase price. After you complete the process, you must pay the remaining balance, usually through a mortgage.

Stamp duty is dependent on the property price. If you are a first-time buyer, you can purchase a home worth up to £425,000 without paying stamp duty.

You must pay numerous legal fees, including solicitor fees. This includes conducting searches and protecting your deposit.

Additional costs can include things like carpets, fixtures and landscaping. Developers may offer incentives, saving you money.

Other fees may apply.

Pros of buying off-plan

Discounted prices

Developers want to attract early buyers, so you might be able to negotiate a substantial discount when buying off-plan. To generate interest with new developments, the developers can offer incentives. This can include early bird discounts and deposit contributions.

First-time buyers can also receive further discounts through schemes like the First Home scheme, saving them an extra 30% on new homes.

It is important to note that the current market conditions can influence discounts and incentives.

Customisable options - Kitchen, tiles etc

Buying off-plan allows for significant customisation opportunities. Whilst the options differ between developers and on build stage of the property, many buyers are able to choose kitchen fixtures and fittings, bathroom tiles and flooring.

This is attractive for many buyers. Buyers can personalise their house ahead of time, meaning a stress free completion day.

Price lock

A huge financial benefit to buying off-plan is the price lock. Once buyers reserve a plot and sign contracts, the developer must sell the property at the agreed price. If property prices rise, the cost of the property is locked in.

It is an appealing factor for first-time buyers. Allowing them to save more and plan ahead without being priced out. Giving them security when getting on the property ladder.

Capital growth during construction

Especially in high demand areas, the value of properties during construction can increase. If property prices rise between exchanging contracts and completion date, the property’s value may increase.

On completion, the buyer will pay the lower amount that was agreed upon when they exchanged contracts.

Risks of buying off-plan

Delays

Delays on the build process can sometimes be unavoided. With stortages in materials, labour and financing as well as the weather playing a major role in halting the progress.

It is recommended to review developers track records, however no deadlines can be guaranteed.

Changes in the market

Buyers must consider the possibility of a market shift. Once the plot has been reserved and contracts exchanged, the property price is locked in. If property prices decline before the completion date, you could be paying more than the property is worth.

Specification changes

Even once buyers have agreed to purchase, developers retain a right for specifications to change. Reviewing the purchase contract is important. Developers often state that they can modify the agreed specification with limited or no warning. Some changes can be unavoidable due to supply shortages of certain items.

What will the final property look like?

When buying a property off-plan, it is impossible to know exactly what it will look like. The property may not meet the buyer's expectation so snagging inspections are recommended ahead of completion. Ahead of agreeing to buying off-plan, many potential homebuyers will visit show homes of the developer they are interested in buying from. This helps give an idea of build quality and what they can expect from their new home.

Interested in buying off-plan?

Here are some developments that currently offer off-plan buying

Whiteley Meadows by Linden Homes, Whiteley, SO23 2HB. A development with three, four and five bedroom houses. Whiteley Meadows is less than 10 miles from Portsmouth and Southampton. A convenient location for young families, with a selection of nearby 'Outstanding' ofsted rated schools.

Managed by an award winning site team, arrange a visit to view their two show homes.


 
 


Old Coleham Court by SY Homes, Shrewsbury, SY3 7BQ. A development of one and two bedroom apartments. A stylish development that has seen significant architectural investment. At the heart, there is a relaxing courtyard for residents to enjoy, as well as secure parking.

Over 30% of properties have already sold. Don't miss out, enquire today.


 
 


Moat at Harbour Village by Moat Homes, Ebbsfleet, DA11 9LB. A Shared ownership development of two bedroom apartments. Homes come with a fully-fitted kitchen with integrated appliances, turfed rear garden and quality flooring throughout.

The nearest train station is a 4 minute walk away. Getting you into central London within 19 minutes.