The Benefits of Buying Off-Plan Property

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. Zoopla house price data states that the average house price in Liverpool is £177,338 as of August 2021.  

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. 

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. 

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 build 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. 

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.  

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