Investing in off-plan Property developments, is to purchase a property on a flexible payment plan before the property is complete usually 10-20% below the current market rate 18-24 month before completion.
The developer usually will already own the land and have pre-approval for planning along with a financial instrument in place against homes being pre-sold sounding under a mezzanine debt structure.
Strong advantage purchasing off plan property is only having to put down a deposit from 3-10% within the first month and then flexible payment schedules throughout the build period.(varies from developer and projects in question)
30% down before completion and 70% on completion is common practice within the UK market.
The down payment of 30% can be fixed or flexible, paid over 18-24 months(depending on the developer)
Monies are held in Escrow, client account or held by a solicitor.
All UK property sales must go through a UK solicitor.
You can pay cash, buy to let mortgage or financial vehicle of your choice, depending on your financial circumstances.
We will put you in touch with a panel of lenders through our Mortgage brokerage network.
Most developers will be secured by a performance build bond with a JCT contract enabling a new contractor or developer to tender for the build if anyone in the chain goes bankrupt.
Most contracts have step over rights in place to enable the development gets completed no matter what happens.
Yes, or you can pick one from the developer’s panel to save money.
Most developers will have negotiated a client lawyer to make the process quicker and more efficient saving you time and extra costs that can occur from independent solicitors.
Exchange is the first contract a buyer enters in to legally securing the property investment purchase, this is where you pay the exchange fee usually the balance of the deposit.
Completion contract is final signature handover when you get the keys and pay the remaining final balance owed to the seller.
- Solicitors/conveyancing fees
- Valuation fees
- Ground rent
- Lettings and management fees (10-20%) depending on void cover and insurances
- Capital gains tax
These are the basic supplied fitting and fixtures such as washing machine, fridge/freezer, hob, oven, extractor, shower, toilets.
We find new builds have a NHBC 10-year warranty cover. Consumer code for home builders
Using a dedicated ARLA accredited management company will eliminate all the headaches of renting out your property. Management companies will vet tenants and place deposits in escrow protection facilities exercising an inventory and damage report, dealing with any maintenance issues that may arise.
Some management companies can financially cover void periods contact us to find out more.
Reselling the unit will depend upon the current market at the time usually would take 4-6 weeks to confirm a buyer.
Each developer has different rules regards to flipping or reselling before completion flipping can over heat a market quickly creating a bubble.
The developer has an interest to receive the final balloon payment on completion so it’s in everyone’s best interest to complete the development on time so new projects can be started.