Buying an Off Plan Property: A 6-Step Guide

When purchasing a new build, you can either buy before the property has been built or once it has been completed. Buying a property before it has been built is known as buying ‘off plan’. In both cases, you will be purchasing from the developer. This guide will tell you all you need to know about buying off plan, including the process and what your considerations and questions as a buyer should be. For information about buying a completed new build, read our guide to buying a property here.

1. Why buy off plan?

In a market of housing shortages and rising prices, buying off plan has its benefits. 

1. Buying an off plan property could be a money-saving exercise. By the time you move in, your home could actually be worth more than you originally paid for it. 

2. Because the buyer takes some risk in buying off plan, homes are typically available with a relatively small deposit.

3. Buying early also sometimes comes with financial incentives. It’s in the interests of the developer to sell all the properties as soon as possible, so certain discounts might be available. Not to mention the financial initiatives to buy new build available from the government. A good example of this is the Help to Buy equity loan, which is available for new build homes only. Read our Help to Buy guide for more information on the scheme, or check out some of the best Help to Buy properties in here.

4. Another benefit of buying off plan is being able to have a say in how your property is constructed. For example, you may be able to choose your own fixtures, fittings or colour scheme.

5. There’s never any vendor moving logistics to consider, or onward chains to worry about!

HomeViews is the perfect platform to check out developments offering these sorts of opportunities. Kidbrooke Village , Royal Arsenal Riverside, Deptford Foundry, and Hendon Waterside are just a few examples of great off-plan builds reviewed by residents on HomeViews.

Obviously, buying off plan means you’ll have to wait for construction of your property to complete! It’s also worth noting that most mortgages are only valid for six months. If the completion date for your property is going to take longer than this you’ll need to ask your mortgage lender to extend or re-apply. More on this later!

2. Find and reserve a home

Do some research before you choose a home. Without a physical property to look at, you need to be sure that your developer has a good track record. HomeViews is the perfect place to do this. Our verified resident reviews provide first-hand insight into what it is like to buy with a certain developer or live in a certain development. For example, one anonymous verified resident reported a great experience of buying off plan.

“In terms of the flat itself I bought it off plan. Everything was brand new which means it requires minimal maintenance. We have [a warranty] for 10 years. The apartment is very sleek and modern and the quality of all the appliances and furnishings are great. I know lots of my neighbours because we all moved in at the same time.”

Meanwhile, another anonymous verified resident had an experience that was not so positive.

“Some parts of the development are not well built. The outside space is so cheaply done. It looks very disappointing. We bought the flat off plan and they promised more facilities which they didnt deliver.”

Once you have found a developer and development that works for you, you will go and view a show home in lieu of a finished property. If this is a success, you will need to reserve a home with a reservation fee, which is usually around £1000.

After you have reserved an off plan property, you will need to settle on a price. Developers are sometimes open to striking a deal, particularly early on in a project when the sale of properties means continued funding. Even if the developer won’t budge on the price, they may be willing to incentivise in other ways. For example, they may provide free fixtures and fittings or pay your stamp duty.

3. Get a mortgage

Getting a mortgage for an off plan property can be a little more challenging than for a previously owned one. For information on finding a mortgage for an existing property, check out our guide on finding a mortgage here. 

The first thing to be aware of is that most mortgage offers are only valid for about six months. If your home is not completed within this time, you may have to go through the application process again. However, with more and more people looking to buy off plan, many mortgage lenders now have the option of longer offer periods on their deals. Some will offer 12 months on a new-build application, while others will allow you to apply for a six-month extension.

However, in all likelihood there will not be a six-month delay between the contract exchange and your home being ready to move into. Many developers such as Anthology and Berkeley Homes have great track records of delivering customer satisfaction on off-plan properties – the reviews say it all! 

4. Exchange contracts

As with buying a previously-owned property, you will need to hire a solicitor or conveyancer to handle the legalities of buying off plan. Developers will often recommend a solicitor but you’re not obligated to use them – feel free to find your own representation. Make sure your chosen conveyancer is member of the Law Society’s Conveyancing Quality Scheme and The Council for Licensed Conveyancers.

Once the conveyancer/solicitor has completed all of the paperwork, the process moves along very quickly. Generally, you will pay your deposit within 28 days of paying your reservation fee.

5. Keep an eye on construction

After the exchange of contracts, all there is left to do is wait until your off plan property is built. During this time, keep an eye on progress to make sure that everything is being built according to your specifications.

During the final stages of construction, conduct a snagging report on your property. This is the off plan alternative to a survey – a snagging inspector will take a look over the property and check for any problems before you move in. Off plan owner Ben and verified resident Tara report positive experiences with snagging reports on their properties….

“The couple of minor snagging list items I did have were resolved within 24 hours. Overall there arent any aspects which I can think of which would have improved the buying experience.”

“When I attended my home visit prior to completion I could only find 3 minor snagging items  which were instantly addressed. Since moving in I continue to be impressed by the high quality of the finish throughout and know from other friends who have recently purchased new builds that this is not always the case.”

Your developer will give you two different dates for the completion of your property: the short stop date and the long stop date. The short stop date is when they are aiming to have the property ready by. The long stop date is the date by which the property must be complete.

6. Complete the purchase… and move in!

On completion, your solicitor will transfer the remaining balance to complete the purchase and will separately pay stamp duty on your behalf (you will need to have transferred the appropriate amount to your solicitor ahead of time!). Stamp duty for off plan properties is based on the price that you agreed with the developer when you first reserved the property. First time buyers purchasing a property for under £500,000 do not need to pay stamp duty. Once this step is complete, all that there is left to do is enjoy your brand new property!