Your complete guide to buying an off-plan property


Buying off-plan means buying a property before it’s been completed – sometimes even before construction has begun. While it used to be seen as a risky strategy, it’s now increasingly common. Energy-efficient, high-spec and chain-free, off-plan properties have become a popular choice across London for both investors and residential buyers.

Like buying a new car, buying an off-plan property can feel extra special. It could be ideal for you if you have confidence in the market and a good understanding of how the property industry works.

In this guide, we discuss the benefits of buying off-plan along with the potential drawbacks you need to be aware of. We’ll also show you how the process works, plus we’ll give you a list of essential questions to ask your developer.

The benefits of buying a property off-plan

1. Cost: You can often get a bargain by securing the price before the home is built
One of the biggest advantages to buying off-plan is that the price can be set up to two years before completion. This means your new home could be worth significantly more than what you paid for it by the time you move in.

2. Personalisation: You can add your own personal touches

When buying off-plan, you are usually offered a range of upgrades and enhancements. You can select your preferred flooring, fixtures and fittings, and sometimes even furnishings and appliances.

This means you can design your new home to your own exact tastes.

3. Convenience: There’s nothing to do when you move in
As we lead increasingly busy lives, many buyers would rather not spend their weekends redecorating or refurbishing a second-hand home. When you buy off-plan, there’s no DIY to do when you move in and hardly any ongoing maintenance required.

4. Peace of mind: You’ll get a 10-year guarantee
Most new-build homes are covered by a ten-year warranty, such as NHBC’s Buildmark. A warranty scheme will ensure the home will be built to agreed standards and provides a third-party resolution service in case of any disputes with the developer.

The potential drawbacks you need to be aware of

1. Mortgages: It can be hard to get a loan for an off-plan property
Many lenders don’t offer mortgages designed specifically for off-plan properties. There could also be issues with timing. As most mortgage agreements are only valid for six months, if your completion date is further in the future you may have to re-apply.

2. Timings: It’s hard to plan when the timescale is uncertain
One of the main pitfalls of buying off-plan is that you exchange contracts and pay your deposit relatively quickly, yet you have to wait some time for the property to be completed. If you’re in a chain, this could mean you need to go into temporary accommodation until the property is finished.

3. Expectations: Your new home might not look like the show home
Home sizes can be difficult to judge from a plan, and brochures don’t always provide a clear picture. When viewing the show home, keep in mind that your property will be in a different plot, on a different floor – even in a different building – all of which will affect the views, light and noise levels.

The process of buying an off-plan property

1. Find a suitable development
Research your developer thoroughly. Review their plans and timelines carefully, and look at other developments they have built. 

2. Speak to a mortgage adviser
Find out how much you can borrow, what your deposit will need to be and then get a mortgage agreed in principle with a lender who provides off-plan mortgages.

3. Reserve a home and pay a reservation fee
This is usually between £500 and £2,000.

4. Appoint a conveyancer to deal with the legal side of the purchase
Make sure you find one with off-plan experience.

5. Arrange a mortgage
Your mortgage lender will then arrange a surveyor’s valuation based on the plans and development specification.

6. Complete the paperwork, exchange contracts and pay your deposit
The exchange deposit is usually 10% of the final price (note, this is different from a mortgage deposit). Once you’ve exchanged contracts, you are legally obliged to buy the property.

7. Have a snagging survey done before to check for any defects
Either instruct a specialist firm or do it yourself using this print-off checklist from the NHBC.

8. Get the balance money, and stamp duty (if applicable), lined up for completion day
You’ll often be given two completion dates: the date the developer expects to complete by and the date the developer has to complete by, otherwise you’ll get compensation.


Key questions you should ask your developer before buying off-plan

1. How secure is the deposit?
Ask what happens to your money if they go bust after you’ve exchange contracts, it should be protected in a client money protection account. Generally, only the first 10% of the deposit is protected by schemes such as NHBC. If your deposit is going to be more than 10%, your solicitor should check that there is additional coverage.

2. Are there any deals available?
There are often deals available for cash buyers, investors, and for early purchases.

3. Is the price fixed?
Find out if the price is locked at the point when contracts are exchanged. If not, ask what happens if prices rise or fall before you complete the purchase.

4. What’s included in the price?
Find out what fixtures, fittings or furnishings are included, as well as if stamp duty is included. See what extras you can get thrown in. Don’t be shy – if you don’t ask you won’t get.

5. When will the property be completed?
Naturally, you’ll want to know when the property will be finished. You should also ask if there are any clauses that would penalise the developer – or even give you the option to walk away and have your deposit returned – if they do not complete when they say they will.

6. How many units have been sold?
Find out how much of the development has already been sold, and to whom. If you’re going to be a permanent resident, you may prefer to live among other owner-occupiers than tenants.