How To Check New Build Homes Before Buying Off Plan
Most people looking to buy their first home view lots of properties before settling on one and making that perfect offer. Statistics suggest almost 60% of buyers in the UK look at more than five properties. It’s a time-consuming process that may scare you when you first consider becoming a homeowner, and it’s one reason that some people choose to buy off-plan property.
The Off-Plan Meaning You Need to Know Now
What is off-plan property? If you buy a house or a flat off-plan, the meaning is that you essentially buy it before it has even been built. Buying off the plan has several pros and cons, but with property prices ever on the rise across the UK, the simple reality is that buying off the plan offers more pros than cons for many people. More often than not these days, buyers will create long queues to see show homes so they, too, can decide if they wish to engage in buying property off-plan. House off-plan buying even has some hidden advantages other home buying options do not, namely the fact that they qualify for Help to Buy equity loans as well as the First Loans program, some of which are only available on new build homes like these. The process, though, isn’t necessarily the best option for every single buyer. Instead, you’ll need to do a bit of research before you decide to buy houses off-plan
What Are the Benefits and Drawbacks of Buying a New Build Off-Plan?
If you’re considering an off-plan purchase, it may be beneficial to look at the benefits and drawbacks of the process of buying off the plan. While these depend a bit on the property market where you live, some cross-regional lines. First, let’s look at the advantages of buying an off-plan property.
One of the biggest benefits of buying a house off plan is that the home itself could be worth more than you initially paid for when you first moved into the home. Remember that the property market shifts and changes on a nearly constant basis. As a result, when you sign the contract and buy off the plan, it may be worth less than the property market will say it’s worth when you actually see the finished product and move in. That can mean you have equity when you buy off-plan property the moment you unpack your first box, and that’s a great way to start living in the biggest investment you’ll ever make. Is buying a new home a good investment? In most cases, absolutely.
Another big benefit of buying off the plan is the fact that you could get a discount on the purchase price if you are one of the first people reserving a new build in that model in that location. That, in and of itself, comes with another huge benefit. It means you have the chance to secure one of the best plots in those off-plan developments, and that may have some perks, too.
Maybe one of the biggest benefits is that when you buy a plan UK developers have for sale, you’re likely going to have some say in what your dream home looks like. When you choose this method of home ownership, often you get to choose your fixtures and fittings and make simple choices like wall colours, carpet styles and even trim options. That can be a huge bonus if you’re particular about how you want your new home to look.
For as many benefits as the process of buying a property off plan, though, there are certainly some drawbacks as well. Perhaps the biggest one is that you’ll have quite a wait between when you agree to a home purchase plan in the UK and when you move in. In some cases, you may have to wait up to a year for the developer to finish the property itself.
Another real disadvantage to the process is the fact that should you decide buying the home isn’t right for you, you might lose the deposit you placed on your reservation. Those deposits can be quite significant, so as a result, you may have less money overall to shop for the right home to meet your needs.
Additionally, it’s important to understand the answer to the question of how long can you reserve a new build for mortgage company offers to expire. This is one of the bigger drawbacks to buying an off-plan for sale. Most mortgage companies will only offer you an agreed timeframe of six months, and in some cases, the off-plan property can end up taking longer. Off-plan property investment could end up taking a lot longer if there are unforeseen project delays. Investing to buy a house, particularly one that is still in the process of being built, may come with a few surprises, and the bank may have to reissue the mortgage, which could create problems if you’ve had some unforeseen financial issues while your off-plan property was being built. If you don’t end up being able to buy it as a result, you could find yourself in a lawsuit from the property developer.
The other drawback to this process is the fact that if you’re the first one in the area to move in, you may quickly realise that you’re living in a construction zone. That can become quite frustrating in a hurry.
Where Do You Find Off-Plan Property for Sale?
The best way to identify the right property plan homes for sale is to work with a local estate agent. For example, if you’re looking for an off-plan property in London, you’d want to work with an estate agent nearby. Often, they’re already in contact with many of the developers in the area, so they can help you better understand what’s nearby and what might work for your specific housing needs. Search engines can be quite helpful here, too. If you simply search for home developers in your specific area, you’re likely to come across several development companies that are currently working on developments nearby, and they may be looking for potential buyers. For example, Boningale Homes develops some amazing properties in the West Midlands, so they might be a good place to turn if you’re looking for property specifically in that area. You can also just enter search terms in your area like “off-plan property for sale London” to learn more about what’s available in the area.
Is An Off Plan Mortgage the Same as a Traditional Mortgage?
Off-plan mortgages are mostly the same as other kinds of mortgages. You’ll need to meet the same guidelines that most people who are applying for a mortgage meeting. You’ll need to show that you have a good credit score, a stable job and that you haven’t had any real issues with the loans you’ve taken out in the past. When you buy off-plan, you’ll see some of the same mortgage options others do, but you may have better luck if you choose to work with a broker who specialises in off-plan mortgages, as they will help you find an option with the most favourable terms available. Remember, too, that mortgage offers do expire, so you’ll need to ask how long the mortgage offer will be held for as you wait to move into your new property.
Can You Flip Off Plan Properties?
If you’re thinking of investing in properties so you can flip them shortly, off-plan properties make a great option. The term flipping just means you buy a home, and then sell it for more than you initially purchased it for. If you’re new to property investment as a whole, you’ll want to spend some time learning how to flip houses. UK investors do it regularly, but there is a learning curve with this skill. For example, it’s important that you learn more about the best area to flip houses. UK neighbourhoods for flipping around, but some offer more opportunities than others. Learning how to make money flipping houses in the UK isn’t easy, but it is possible. You’ll need to understand how to finance a house flip as UK investors do and lots of other skills like how to read house blueprints as UK investors do.
Keep in mind that as with any investment, off-plan houses for sale be fairly risky. If you plan to flip an off-plan property, you’ll want to do so in the earliest possible market, as you’re likely to get the biggest discount in those situations, especially when it comes to off-plan developments in London and other big areas. Remember, though, the housing market changes very quickly. Can you learn how to flip houses with no money? UK investors can do it, but it’s going to be tough. If you choose to flip houses, UK investors usually use cash because getting a mortgage for a flip can be quite hard to do. If you’re considering flipping one of these off-plan properties for sale, the single best thing you can do is to check with the developer and the lender and figure out a plan of action moving forward so you know how to recoup as much of your investment as you possibly can when you buy a plan. You may also want to use a property flip calculator. UK investors often use these to help determine exactly what they might make on a home of a certain size in a given area.
What Should You Ask Before You Buy an Off-Plan Property UK?
If you think buying an off-plan property might be the right choice, whether you plan to live in the property or flip it, there are several questions you’ll want to ask before you make your purchase so you can make certain you’re getting the right property to meet your needs.
First, ask about the developer’s reputation. You need to know about the other developments the builder has created to see if the homes advertised match the results achieved. Along with that, learn a bit about how satisfied the customers of those pre-built homes were. It can help to understand whether the customers who bought from this developer in the past were truly happy with the results. If it’s not a home, you may want to ask others who have worked with this developer something like “Is buying a flat a good investment with this property company,” so you learn more about the value you might be getting in return.
The next question you’ll want to ask deals mostly with pricing. Figure out if there’s any potential at all for the builder to negotiate. This may not be super important to you, but it could end up helping you save some money in the long run. Many builders are willing to offer some significant deals at the start of a project, as it helps them to continue the development of the project over time. Most big discounts, though, go to cash buyers or those who are looking to buy multiple homes so they can flip them. While some builders won’t negotiate with you on the price of the home, some will let you choose fixtures and fittings or even cover your stamp duty. This may also depend on where you are. If, for example, you decide to buy off plan in London, you may have a tougher time finding a discount because so many other people are looking for homes. Don’t forget to ask whether it’s eligible for the Home for Life plan UK lenders offer, too, as you could get a great deal in that situation.
You’ll also want to be sure that there are some protections in place to help you out should something happen in the course of development itself. The developer should have insurance to help safeguard against any financial issues the developer encounters during the development process. If they don’t, this is likely a development with which you don’t want to be involved.
Access issues should also be a concern. If you will have the first home completed, it may be tough to get to your home at times. That could mean you face service charges and the like to even access your property while the roads around it are being developed. It may also be in the middle of a construction zone, so you’ll continually be hearing the noise of construction as you live in your space.
If you think an off-plan home is for you, there’s never been a better time to learn more.