Everything You Need to Know About Buying Off Plan Property

Firstly, let’s clarify what does ‘off plan’ property mean? When you buy off plan, you are purchasing a property before its construction is fully completed, often during the initial planning or building phases. These off plan properties are typically offered at a discounted price compared to their projected value upon completion, making them particularly attractive for off plan property investment.

While not as common as traditional buy-to-let investments, buying property off plan in the UK offers unique advantages for savvy investors.

This is what makes the asset so attractive – an off plan investment property provides two income streams and an almost immediate return on investment in terms of capital growth.

Generally, when you decide to buy off plan property, you will need to pay a reservation fee to secure the property. Following this, a deposit is required, which can range from 10-20% and sometimes upwards of 30%, depending on the specific developer and the development.

Buying an off plan investment property in the UK provides the opportunity to acquire a brand-new asset with the potential for significant capital appreciation during the construction period, followed by rental income upon completion. This dual income stream and potential for immediate capital growth are key reasons why off plan property investment is so appealing.

There are numerous compelling reasons to consider an off plan investment. Property, in general, remains a resilient and rewarding asset, offering the potential for two distinct income streams. However, off plan properties can offer even greater potential for long-term growth compared to traditional property investments.

Here’s why investors are increasingly looking at buying off plan properties:

Potential for Below Market Value Purchase:

A significant advantage of purchasing off plan property in the UK is the opportunity to buy at a price that is often below the projected market value upon completion. In a market like the current UK property landscape, where undersupply exists in many areas, strong demand can further drive up the value of off plan property during the construction phase.

Choice and Customisation:

When you buy off plan, you often have the advantage of selecting your preferred unit within a development. If you are satisfied with the location and the developer’s reputation, you can usually choose specific features, layouts, and even floor levels. Some developers also offer furniture packages, allowing for a hassle-free move-in or rental setup.

Guaranteed New Build:

Off plan properties are, by definition, new or recently refurbished builds. This guarantees a modern property that benefits from contemporary features like energy efficiency, environmentally-friendly specifications, and adherence to the latest building regulations. These features can translate to lower utility bills for tenants and potentially higher rental yields.

Flexibility in Investment Strategies:

Off plan investment offers unmatched flexibility. Investors can potentially benefit from capital growth before completion and then choose to either rent out the property for long-term income, sell it for a profit immediately after completion, or even consider short-term lets depending on the location and demand.

Related: Should You Buy Off Plan Property in 2025?

Understanding how to buy off plan is crucial for a successful investment. Here’s a general overview of the process:

1. Research and Identify Opportunities: The first step is to research the market and find off plan developments that align with your investment goals. Look for reputable developers with a proven track record in desirable locations within the UK. Consider areas with strong growth potential, such as Birmingham, which is currently experiencing significant investment and projected price growth.
2. Due Diligence on the Developer: Thoroughly research the developer. How many projects have they successfully completed? What is the quality of their previous work? Are they financially stable? This is a critical step to mitigate risks.
3. Reservation and Legal Advice: Once you find a suitable off plan property for sale, you will typically pay a reservation fee to secure it. At this stage, it’s essential to engage a solicitor who specialises in property law to review the contract and ensure your interests are protected.
4. Deposit Payment: After the legal checks are complete, you will need to pay the agreed-upon deposit.
5. Construction Period: During the construction phase, the developer will usually provide updates on the progress.
6. Completion and Final Payment: Once the property is completed, you will make the final payment and the legal transfer of ownership will take place.

If you are looking for off plan properties for sale in the UK, there are several avenues to explore:

• Property Portals: Many major property portals list off plan properties alongside existing homes.
• Developer Websites: Directly check the websites of property developers who specialise in off plan developments.
• Property Investment Companies: Some companies focus specifically on sourcing and marketing off plan property investment opportunities.
• Property Exhibitions and Events: Attend property exhibitions and events, both online and in person, where developers often showcase their latest off plan projects.

Off plan property investment in the UK can be a strategic choice for investors seeking high growth potential and modern assets. The ability to buy at a potentially discounted price and benefit from capital appreciation during construction makes it an attractive option. Furthermore, a new build property often requires less maintenance in the initial years, potentially leading to better returns.

However, as with any investment, there are elements of risk and that’s why it’s very important to go with a property developer that is trusted. This due diligence should be a critical part of your wider investment planning. 

Firstly, it’s important to know the developer working on the project and who is listing off plan properties for sale. Research the developer and ask the questions; How many developments have they completed in the past? What are their building standards for these completed projects? Are they financially stable?

There are also external factors to be aware of before making a property investment such as property values falling. This could affect lending on the property meaning your deposit will need to be higher.

Ensuring you also have guarantees on your property is vital and you should always check to see if it’s included in the contract with your developer. This could protect you against defects that may occur when you complete on your property.

At a time when the off plan property investment in the UK can expect to benefit from price growth of 4.5% over the next year, there’s a strong case for investing off the plan.

This is particularly true when we consider the locations across the UK demonstrating excellent potential.

Based on expert forecasts, Birmingham property is set to see prices grow by 19.9% over the next four years – the highest in the country – driven by low supply and high demand.

This is supported by predictions that the second city will also lead the way for annual growth each year, further highlighting the potential for off plan property in Birmingham.

It’s this opportunity to buy at a lower-than-market-value, while also building the value of an investment before it’s built, that makes off plan property such an attractive proposition.