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The Benefits of Buying Off-Plan Property

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    Discover Off-Plan Property Investment

    While investing in off-plan in the UK is a popular property investment venture, many buy-to-let investors are still puzzled about whether they should invest in off-plan property.

    So, what are the benefits of buying off the plan when investing in property?

    In this helpful guide, we’ll look at five reasons why you should invest in off-plan property in the UK.

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      1. Below-Market Prices

      Buying off-plan property in the UK is often cheaper than buying an existing property.

      This is because off-plan property developers will usually offer the property at a discounted sale price to try and entice new buyers.

      Properties in the UK can be found at up to 55% below market value prices if they’re off-plan.

      Due to property market demand, buyers right now are struggling to find properties available to purchase for their asking price – never mind below.

      These affordable property prices offered by new build investments are a breath of fresh air for first-time buyers or buy-to-let investors with a lower budget.

      Why Is This One of the Benefits of Investing in Off Plan?

      By choosing off-plan properties as an investment, you can buy a property in a desirable UK city for much less than you might pay for a standard property type.

      Let’s look at the Liverpool property market as an example. The latest House Price Index data states that the average price in Liverpool is £177,803 as of June 2023.

      A property like the Summit, a new build off-plan development located in the Baltic Triangle, has units to purchase for only £139,950.

      Property investors who make an off-plan purchase can save money compared to if they purchased an older property.

      The money they save could then be put towards another investment, helping the investor build their property portfolio more quickly than they would when buying property with a higher purchase price.

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      2. More Freedom

      Another benefit of buying off-plan property is the freedom that comes with this investment type. 

      Because these properties haven’t been finalised, investors can pick and choose the best units.

      For instance, investors can research the different units available and consider whether the dimensions and specifications suit their investment goals.

      Suppose a property investor has a specific property in mind that they want to invest in, such as an apartment with a balcony or a spacious en-suite. In that case, the buying process for off-plan property will benefit them.

      Why Is This One of the Benefits of Investing in Off Plan?

      Since the pandemic, more renters have started looking for homes to rent that feature specific attributes.

      By choosing multiple units within a development, you can select apartments with balconies or other desirable qualities like dedicated space to work from home or good city views.

      This could help increase demand levels for your investment property and make sure you attract your ideal target tenant quickly, making void periods less likely.

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        3. A New, Modern Building 

        New build homes are some of the most popular in the UK for both homeowners and investors alike.

        New properties have aesthetic benefits due to their fresh, modern designs.

        Those who favour a more contemporary look in their home, such as students or young professionals, are often drawn to stylish new built houses and apartments.

        Not only do new off-plan homes look good, but they’re also beneficial due to their sustainable qualities. 

        Brand-new homes tend to be built with more eco-friendly materials. Research has found that 80% of new homes have an A or B energy-efficiency rating.

        Why Is This One of the Benefits of Investing in Off-Plan?

        Property investors need high rental demand for their venture to succeed.

        By purchasing a property considered desirable by their target tenant, interest from renters will be higher.

        Young people are now a lot more conscious of environmental issues than ever before.

        A massive 74% of Generation Z consumers have reportedly made changes to become more environmentally friendly.

        Increase your likelihood of high tenant demand and attractive rental yields by going green with off-plan investment.

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        4. Enhanced Capital Growth Potential

        When you buy off-plan property, you often need to wait many years until the development has been completed and is ready to be tenanted.

        The fact you have to wait for the completion of a property that’s off-plan means that you could see the property value of your investment increase even before it’s ready to be lived in.

        This is why capital growth is often considered higher with off-plan properties, especially when the development is based in an area with increasing house prices.

        Take our past Liverpool project City Point as an example. One unit within this development was first listed and sold for £59,995 in February 2019.

        By November 2019, the unit was then resold for £69,995. This highlights a 16% growth in market value within just one year and ahead of the development’s completion in 2020.

        Why Is This One of the Benefits of Investing in Off-Plan?

        When you invest in property, capital growth is something you always want to look out for.

        That’s why it’s a good idea to look for ways to increase your likelihood of capital growth as much as possible.

        If you invest in an off-plan property for a below-market value price and then find that once the property is complete, a valuation discovers some impressive capital gains, this is a good sign that you’re in line for even more capital growth in the future.

        Remember to always research location when choosing your off-plan property to really get the most out of your potential capital gains.

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          5. Staged Payment Plans

          Another major benefit of buying off the plan property is that you can split payments into separate stages.

          Property investors often don’t need to pay for the entire purchase price until the development’s completion date.

          A small deposit will be paid upon reservation, along with a percentage of the overall property price.

          Investors can then pay another instalment during the construction of the development before their final payment is made upon completion.

          Why Is This One of the Benefits of Investing in Off-Plan?

          Not every investor is lucky enough to have the total investment funds needed to buy a property straight away.

          Many buy to let investors seek out a buy-to-let mortgage to pay for their investment.

          However, issues can sometimes arise with off-plan property due to most lenders keeping a mortgage application valid for just six months.

          After six months, you may have to fill out the application again if the property is not complete, which can be a hassle.

          Having the payments spread over multiple stages can simplify the buying process and mean you don’t have to worry about mortgage repayments further down the line.

          Find Out How to Buy Off-Plan Property in the UK With Our Step by Step Guide

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          Interested in Off-Plan Property Investment?

          If you’re ready to purchase your first off-plan property, invest with RWinvest today.

          We’re one of the UK’s top property investment companies, specialising in residential and student off-plan developments with below-market prices, excellent rental yields, and great capital growth potential.

          Contact us today to kick-start your buy-to-let journey.

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          Author

          Reece Pape

          Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news, utilising the latest property market statistics and data.

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            I can honestly say they have put my mind at rest from day one answering all my questions I had , true professionals, I am not experienced in buying off plan or for a rental income but I have to say the process has been smooth from sales to Chloe in client care and now I’m handed over to the final stage for the site visits
            I feel very relaxed and happy with how amazing the team have been. I I can’t wait now to see the end built ! Thanks 🙏

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            I have had the pleasure of experiencing exceptional customer service from RWinvest. Adam and Michelle were remarkable and were exceedingly supportive in facilitating the acquisition of two properties in Liverpool, at "The Gateway." Their guidance was instrumental in the purchase of the properties and I express my utmost satisfaction with their assistance, and I am inclined to not only endorse but also consider any property advertised by RWinvest.

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            I am very happy and satisfied with RWinvest. Their team was always responsive, supportive and friendly throughout my investment process. Thomas from RWinvest team was especially very supportive and he made sure that I have all the necessary information at the right time. He helped me with all my queries, and helped me to complete my investment process smoothly and with peace of mind.

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