How do you buy a UK property off-plan?

Investors and first-time buyers like off-plan homes that are still being built or planned because they can get a better deal than homes that are already built or ready to move into. According to sales data, about 31% of the homes sold in the UK last year were off-plan.

In London, where apartments make up most of the property market, almost 55% of flats were sold before they were finished. This shows that there is a lot of demand and trust from buyers. Some reasons why buyers opt to invest in a property early are that the costs are lower, they can use new amenities, they can expect substantial capital appreciation in desirable neighbourhoods, and there is a strong demand for rentals.

What is off-plan property buying?

Off-plan property buying refers to investing in a property before it is completed and ready for occupancy. There are different stages of off-plan buying. Based on visual representations such as CGI models and digital floorplans, you could buy a property in the construction phase or even before the developer breaks ground.

Many leading developers work simultaneously on multiple schemes, and selling off-plan helps them raise valuable capital, which they can use for ongoing projects. Most new homes in the UK are marketed and sold off-plan, as they benefit both the buyer and the seller.

Steps to buy an off-plan property in the UK

While off-plan property purchases have the potential to become profitable investments, there are a few things you need to keep in mind before taking this route.

1. Do your research

Since you’re buying a house that is not yet ready, the developer’s credibility is crucial. Check all previous projects and reviews about the developer to get a fair understanding of how they function. You can also read our detailed area guides for knowledge and insights about the different neighbourhoods you’re considering.

2. Visit the show home or take a virtual tour

While physically visiting the site and checking out the developer’s show home is ideal when buying off-plan, overseas buyers can opt for a virtual tour to better understand the layout, interior specifications and promised finish.

3. Understand the payment terms

Payments for off-plan properties are usually staged and linked to the development or construction phase. A typical off-plan purchase may include a reservation fee that takes the property off the market for other buyers, followed by an exchange deposit and a final payment upon completion.

4. Legal and mortgage preparation

Whether off-plan or completed, buying a property in the UK requires the expertise of a qualified solicitor. Many lenders avoid off-plan mortgages, so it is essential to check with different banks and lenders and have a mortgage in principle. You can work out an estimated cost using our mortgage calculator.

5. Track construction updates

Developers usually share timely construction updates on the agreed timelines and notify in case of any unprecedented delays. They are also required to share clarity on the handover and snagging processes.

6. Pros and cons of buying off-plan

Pros: Significant discounts and negotiation are offered, the property is brand-new upon completion, and quick value appreciation as demand increases. There is no buying and selling chain.

Cons: Slight uncertainty about timely completion, putting money into an asset that isn’t fully ready, fewer mortgage options, and pressure to use the developer’s solicitor.

7. Key things to check before you buy off-plan

Although off-plan properties offer buyers several benefits, you must do basic due diligence before proceeding. Always check the developer’s reputation, build warranties, completion dates and contract terms for full disclosure and transparency.

8. Is buying off-plan safe in the UK?

Buying an off-plan property in the UK is considered safe as strict laws and regulations protect buyers. While there are NHBC warranties for construction and build quality, several deposit protection schemes ensure payments made to the developer are protected.

9. Off-plan buying tips for overseas investors

As an overseas property buyer in London or anywhere in the UK, you need to know the current currency exchange rates and work with a local solicitor to complete all legal formalities. Additionally, working with a reputed estate agent is recommended for a smooth and hassle-free reservation process.

10. What happens after you buy?

Upon successful completion of the purchase of your UK property, including stamp duty payments, there are a few more steps to ensure your new house is delivered as the developer promised. While professional snagging will help reveal any structural flaws, assistance with furnishing and lettings will ensure your property delivers value, fulfilling your investment goals.

Final thoughts: Is off-plan buying right for you?

If you’re an investor who doesn’t mind waiting or a first-time buyer looking to move into a brand-new property, buying off-plan can be a smart strategy. Buying pre-construction has many benefits, and proper planning can help you bag a good deal.

At Benham and Reeves, we provide a full range of services to help buyers find, buy and manage their off-plan London property investments. We have 21 branches across London and 14 international offices, and our expert property professionals are always available to assist you. Contact us to learn more about property investments.