What it really means to buy a home off-plan

Whilst it’s recommended that you view a property between two and four times before making the decision to purchase, an increasing number of people are choosing to buy sight unseen. The off-plan trend has been growing rapidly as the number of new build developments increases and the UK housing crisis continues to intensify.

By buying off-plan, you’re committing to purchasing a property that you haven’t stepped inside of. In fact, it’s likely that the property you intend to buy hasn’t even been built yet! So why are homebuyers taking the drastic step of buying off-plan?

Here, we share our guide for buyers looking to purchase new builds and explore the pros and cons of buying off-plan.

Is buying off-plan more affordable?

One of the main perks of buying a property off-plan is the purchase price. Most developers provide off-plan properties at discounted rates. Here the Property Investment Project explains why:

“Off-plan property is usually priced lower than what the actual property would be worth once built, that’s because developers usually want to secure a few sales to try and get their money back, it’s kind of like a safety-net. By the time the property is built, due to inflation the property should be worth more than what its market value was when you signed the contracts.”

As an off-plan buyer, you could be sitting on increased equity before you even move in! As a result, some buyers choose to ‘flip’ their properties – i.e. sell up before they’re finished – or cash in at a later date to really make the most of this discount.

Is it simpler to buy off-plan?

Yes and no. The property buying process is simpler; you’ll reserve your home with very little competition, appoint your solicitor or conveyancer, arrange your finances, exchange contracts off-plan and then check your home is finished before you complete and move into your off-plan property. Arranging finance for an off-plan property, however, is a little trickier.

Many mortgage providers don’t offer deals for purchasing off-plan. In addition to this, your finance is only secure for a set period, which means if the build of your property is delayed, you may have to reapply for a mortgage all over again. This could leave you at risk of mortgage rejection and deposit loss.

We always recommend obtaining independent mortgage advice to find the off-plan product you need to purchase your new home.

Can an off-plan home be personalised?

Another advantage to buying off-plan is the opportunity to truly personalise your property. As well as your property being brand new, many developers give you the chance to tailor it to your exact requirements.

When purchasing off-plan, you may be able to tweak the layout, fixtures and fittings. By reserving your off-plan home early, you may also be able to stipulate where your plot sits within the wider development.

Are there any more risks to buying off-plan?

All these rewards don’t come without risk. As you may already know, the world of off-plan properties has its fair share of horror stories, with build delays and quality just two of the main bugbears amongst buyers.

While developers have to provide a new build warranty as standard, the prospect of purchasing a property that you later discover is badly built is a possibility. By not being able to view your property before purchase, you also run the risk of not being happy with the property you buy.

Need help financing an off-plan purchase? Get in touch with us today for further advice and support.

Image: Elizaveta Galitckaia / Shutterstock.com