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How To Invest In Off-Plan Property

How To Invest In Off-Plan Property

Are you wondering how to invest in your first property in 2024, but don’t quite know what to expect once you enter the market? Keep reading to find out the steps our buy-to-let investors typically encounter when they purchase an off-plan property with us – from reservation to completion and future considerations for the long-term success of your property.

Related: Why Invest In Your First UK Property In 2024?


Purchasing a property off-plan typically commences with the completion of a reservation form accompanied by an initial payment to secure your chosen unit. The reservation agreement outlines the agreed-upon price, the schedule for deposit payments, and the timeframe within which contracts must be exchanged. This typically ranges from 14 to 28 days upon the dispatch of draft contract papers and supporting documents to your legal advisor.

This reservation fee secures an exclusive hold on the property, facilitating the engagement of your solicitor and the completion of pre-contract legal procedures without having to worry about competition from other interested buyers. While the reservation fee is non-refundable should you opt to withdraw from the deal, it does not obligate the developer to sell the property to you. In the rare event of the developer withdrawing before the expiration of the exclusive period, they are obliged to return your reservation fee. Similar to the purchase of a previously owned property, all parties are bound only upon the exchange of contracts.


Upon reaching the exchange stage, the deposit, typically amounting to 10% to 20% of the purchase price, minus the reservation fee, becomes payable. It is recommended to engage a solicitor prior to reserving a property to facilitate the essential legal procedures before the contract exchange and ensure timely compliance with deadlines. Should you decide against purchasing the property after exchanging contracts, you will likely lose your deposit.

Securing A Buy-To-Let Mortgage

The next step in discerning how to invest in property is securing your funding. A buy-to-let mortgage differs significantly from a mortgage for your primary residence. Firstly, the amount you can borrow is primarily determined by the anticipated rental income from the property, although additional income may be considered. Typically, lenders require the rental income to be 25% to 45% higher than the mortgage payment.

Moreover, acquiring a buy-to-let property necessitates a larger deposit, usually around 25% or more. Additionally, interest rates for buy-to-let mortgages are typically higher than those for residential mortgages. Many lenders impose product fees, and it is essential to factor in standard property purchase expenses like surveys and legal fees.

Opting for a fixed-rate mortgage ensures consistent payments throughout the fixed term, regardless of interest rate fluctuations, though the initial rates are often higher compared to variable mortgages. Variable-rate mortgages offer lower initial interest rates, but they are subject to fluctuation based on the lender and changes in the Bank of England base rate, leading to potential adjustments in mortgage payments over time. If you’re unsure about any aspect of selecting a buy-to-let mortgage, please be sure to seek guidance from a mortgage adviser.

Related: How To Work Out Your Rental Income?

Completion And Handover 

Ahead of the designated completion date, your solicitor will seek the remaining funds from your lender, preparing them for transfer to the seller upon completion. Upon the arrival of the completion day – which, for off-plan properties, could be two years after exchange once the build finishes –  funds will be transferred to the seller’s solicitor, officially transferring ownership of the property to you. At this point, you can retrieve the keys to your new property and take possession.

Furnishing Your Buy-To-Let Property

Offering furnished accommodations can significantly boost the rental income you can command for their property – some estimates suggest that furnished units can command rent 20% higher than their unfurnished counterparts. Depending on factors like location, property type, and rental demand, outfitting your property with quality furnishings is sure to attract renters seeking a hassle-free experience, including mobile professionals, corporate tenants, international visitors, students from abroad, and those in need of short-term housing solutions. By catering to this diverse tenant pool, you stand to reduce vacancy periods and elevate rental rates, contingent upon the caliber of amenities and furnishings provided.

In terms of furnishing options, investors have the flexibility to offer properties as fully furnished, partially furnished, or unfurnished. Many opt for a middle-ground approach, partially furnishing units with essential items like domestic appliances and window coverings, which tends to appeal to tenants seeking self-contained living spaces, be it apartments or houses. Typical furnishings might include foundational pieces like a coffee table and sofas for the living room, a bed frame and wardrobe for the bedroom, and dining chairs and a table for the kitchen.

Finding A Tenant 

Now your property is market-ready, it is time to source some tenants. It is vital to consider your key tenant demographic when marketing your property – studios may be great for students, city-centre flats will appeal to working professionals, and more suburban houses may attract more families. As such, when you are advertising your property to find a tenant, it is worth keeping your ‘ideal tenant’ in mind and showcasing the aspects of your unit that will attract these individuals, from parking spaces, nearby transport connections or proximity to educational institutions. 

More often than not, investors will use a letting agent in order to put their property on the market for rent. These agencies will typically already know of tenants searching for properties like yours, which can expedite the process of sourcing a tenant. Furthermore, these agencies will most likely already have access to property portals such as Rightmove and Zoopla, as well as staff to manage viewings, take professional photographs of your unit, and carry out checks on your prospective tenants to determine whether they are suitable.

Future Considerations

After successfully renting out your buy-to-let property, it’s crucial to remain diligent in several areas to ensure continued profitability and tenant satisfaction. Maintenance is paramount, as regular upkeep not only preserves the property’s value but also fosters positive tenant relationships. Establishing a maintenance schedule for tasks like boiler maintenance, plumbing checks, and general repairs can help prevent issues from escalating and minimise unexpected expenses. Many letting agents will be able to carry out these tasks on your behalf, conducting inspections regularly and sourcing professionals to fix these problems.

Avoiding void periods is another key consideration to safeguard your rental income. Promptly addressing tenant concerns, maintaining competitive rental rates, and proactively marketing the property before vacancies arise can help minimise downtime between tenancies. Additionally, fostering strong tenant relationships and promptly addressing inquiries or issues can encourage lease renewals, reducing the likelihood of extended vacancies.

This is linked to tracking the performance of your rental unit, which is essential for informed decision-making and optimising profitability. Utilising tools like rental management software or spreadsheets to monitor expenses, rental income, and tenant turnover rates can provide valuable insights into the property’s financial health. Regularly reviewing these metrics allows investors to identify areas for improvement, such as optimising rental rates or addressing recurring maintenance issues, to maximise returns on investment.

Related: Case Study Of A Successful Investor

Choosing A Good Investment Company

One thread links all of these considerations together, and that is choosing a reputable investment company to guide you through how to invest. This is precisely what Joseph Mews aims to do: we don’t simply source fantastic investment opportunities for our clients, but we assist you in ensuring the long-term profitability of your rental portfolio. Our team of experts can put you in touch with the best mortgage brokers, recommend reputable lettings agencies to help you source a tenant, and will be with you every step of the way from reservation to completion and beyond. That’s the Joseph Mews difference. To find out more about how to invest in the UK property market, and to explore our investment opportunities, please get in touch with our team below.

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