Purchasing an off-plan property offers several notable benefits, including:
- Lower Purchase Price: Developers often offer off-plan properties at discounted rates. As the property value appreciates over time, it could become worth significantly more than what you initially paid.
- Flexible Payment Options: Off-plan purchases typically allow buyers to pay in instalments over time, making it a more manageable financial commitment.
- Customisation & Low Maintenance: Off-plan homes are brand new, requiring little maintenance. Additionally, you can often personalise the property’s decor to suit your preferences without any DIY.
- NHBC Warranty & Insurance: These properties come with an NHBC Buildmark warranty, which includes a two-year builder warranty period followed by eight years of insurance coverage.
Seven Steps to Buying an Off-Plan Home
Follow these steps to navigate the process of purchasing an off-plan property:
1. Find the Right Property
Since you won’t be able to view the property in person, research the developer and review their plans and timelines. Visit the area and the site’s show home to envision the finished property.
2. Choose a Mortgage Adviser
Work with a mortgage adviser who understands off-plan purchases. They’ll help you secure a lender that offers off-plan mortgages, as not all do.
3. Reserve Your Property
Once you’ve selected a property, pay the reservation fee, usually between £500 and £1,000. This amount is deducted from the total purchase price.
4. Find a Solicitor or Conveyancer
Hire a solicitor or conveyancer to handle the legal aspects of your purchase. They’ll manage everything from identity checks to contract exchange and completion.
5. Secure Your Mortgage Your lender will arrange for a surveyor to assess the property’s value based on the plans and specifications. Once completed, they’ll issue a mortgage offer.
6. Exchange Contracts & Pay the Deposit When your solicitor confirms all legal details are in order, sign the contract and pay the deposit.
7. Prepare for Completion Day Agree on a completion date with the developer. You may have the opportunity to inspect the property before this date—confirm with the developer. On completion day, pay the remaining balance and any applicable Stamp Duty. Learn more about Stamp Duty in our dedicated guide.
Key Questions to Ask Your Off-Plan Developer
Before committing to an off-plan property, ensure you ask the developer these crucial questions:
General Questions
- Are there restrictions on the mortgage broker or solicitor I use? Developers may recommend brokers or solicitors, but the final choice is yours.
- When will the development be completed? If your property is part of a larger project, construction may continue around your home. Discuss timelines and potential disruptions with your developer.
- What are the specifications of the property? Clarify what’s included in the purchase, such as flooring or kitchen appliances. If certain features aren’t included, ask if they can be added at an additional cost.
- What documents will I receive upon completion? Your solicitor should handle this, but you should obtain copies of all certifications, warranties, and important documents required for the sale.
- What tax band will the property fall under? New-build properties may not yet have an assigned council tax band. Confirm this with the developer to estimate your annual tax bill.
Questions for Flat Purchases
- What are the lease terms? Review the lease with your solicitor, paying attention to its duration, ground rent, additional charges, and any restrictions.
- Will there be a service charge? For privately managed developments, homeowners often share the responsibility of maintaining communal areas through service charges. Ensure these costs align with your budget.
