Everything you need to know about investing in off-plan property in London 

Key Takeaways

• An off-plan property is a property that hasn’t yet been built. When you buy off-plan, you’re purchasing a property based on floorplans, CGIs, and working drawings.
• You’ll see what the finished product should look like before it’s constructed.

• Personalisation: You may add your own touches, such as kitchen upgrades and flooring.
• Move-In Ready: No need to decorate or do complex DIY; it’s all set.
• Guarantees: Barratt London homes come with an NHBC warranty & insurance policy.
• Energy-Efficiency: New homes meet the latest standards, saving you money and benefiting the environment.
• First Occupant: Enjoy being the first person to live in the property.

What is an off-plan property?

An off-plan property is a property that hasn’t been built yet. This means you need to use floor plans, CGIs, and working drawings to visualise the finished product.

What is off-plan property investment?

Investing in an off-plan property means purchasing before construction completes. This is often when it exists only as architectural plans or is in the early stages of construction. When investing in off-plan property in London, you're reserving a unit in a development that hasn't been built yet. The main benefit is that you can secure it at today's prices, and the value may increase during construction.

Why London has a strong off-plan property market

Growing housing demand means London has a strong off-plan property market, and new developments can be highly sought after. Major regeneration projects and infrastructure investments, particularly around the Elizabeth Line and proposed Crossrail 2 routes, can offer opportunities for early investors.

How off-plan differentiates from completed homes

Off-plan homes are purchased before construction, whereas completed homes are purchased after construction. With off-plan, staged payments are typically involved rather than an upfront amount.

The main difference between off-plan and completed homes

With completed homes, what you see is what you get. You can view the actual property and assess the neighbourhood. Off-plan purchases mean that you’re buying based on floor plans, CGI images, and show apartments. With completion typically over a year away, this can leave room for construction delays and a decline in market value.

However, investing in off-plan property in London means you can secure properties in prime locations at pre-construction prices. Investors may benefit from capital appreciation during the build.

Benefits of investing in off-plan property in London

Investing in an off-plan property in London comes with many advantages. From lower entry prices to modern build quality, off-plan properties can be a great investment option.

Lower entry prices and early buyer incentives

Off-plan properties are usually cheaper initially. Developers want to secure sales, so off-plan homes typically sell below their expected completion value. This gives investors immediate gains. As off-plan property values increase during construction, investing in off-plan property in London means your property will be worth significantly more than what you paid.

Buying off-plan may also allow you to pay in instalments, with lower deposits and staged payments throughout construction. Developers may provide additional incentives such as Stamp Duty contributions, a Deposit Boost, or other offers to attract early investors.

Customisation options and minimal maintenance

An appealing aspect of off-plan purchases is the ability to personalise your property before construction is complete. Many developers offer choices in finishes and fixtures, so you can tailor a property to reflect your taste or target tenant demographics.

New build off-plan homes often require minimal maintenance in the early years, making them move-in-ready. That means no rewiring, renovation projects, or replacing outdated boilers.

Modern build quality and warranty coverage

New builds must meet current building regulations, ensuring superior insulation, energy efficiency, and safety standards. Most achieve EPC ratings of A or B. Modern specifications also include features like triple glazing and smart home technology to improve energy efficiency.

Off-plan properties also benefit from a 10-year NHBC warranty and insurance policy, known as Buildmark, which provides a 2-year builder warranty period followed by 8 years of insurance for structural defects.

Key areas in London where off-plan investment performs well

Location remains crucial when investing in off-plan property in London. So, where might you want to invest in off-plan property in London?

Regeneration zones

Areas undergoing major regeneration can offer some great opportunities for off-plan investors. With new transport links like the Elizabeth Line, neighbourhoods across London are being transformed. Off-plan purchases in these areas can result in lower purchase prices that increase gradually over time.

Emerging commuter hubs

Transport connectivity can drive London property values. Investors can look for off-plan developments near stations that have recently opened or are undergoing upgrades. For instance, areas along the Elizabeth Line, including Woolwich, Abbey Wood, and Ealing, are expected to see capital appreciation as the line matures. This can make off-plan properties in these zones a great investment option.

How off-plan mortgages work

Securing a mortgage for off-plan purchases is slightly different from buying completed properties.

Reservation fees and deposit structure

When investing in off-plan property in London, you may pay a reservation fee of anywhere between £500 and £2,000+ to secure your chosen unit. This may be refundable if the purchase doesn't proceed – check the developer’s terms and conditions.

Your deposit, typically 10% of the purchase price, is paid upon exchange of contracts. This may happen months before completion. Barratt London offers deposit help through schemes like Deposit Boost, where your deposit could be boosted by 5%.

Mortgage offers and timing considerations

Off-plan mortgages require careful timing. Most mortgage offers are only valid for 3 to 6 months, but off-plan completions can take 18 to 24 months from reservation. That’s why it’s important to arrange a Mortgage in Principle (MIP) early, and apply for the formal mortgage closer to the completion date.

If your completion date is delayed, you may need to extend or reapply for your mortgage offer. Make sure to work with mortgage brokers and lenders experienced in off-plan transactions.

Valuations at completion

Lenders require a property valuation at, or near, completion to confirm it's worth what you're paying. This is where investing in off-plan property in London can work in your favour. If the property has appreciated during construction, the valuation will reflect this higher value.

7 steps to investing in off-plan property in London

Investing in off-plan property in London is straightforward with these seven steps.

1. Find the right property

You won’t be able to visit the property, so it’s important to research the developer and review their plans and timelines. You may even want to visit the area and the site’s show home to get an idea of what your finished property will look like.

2. Choose a mortgage adviser

A mortgage adviser can help you find the best deal for your circumstances. Let them know you’re buying off-plan so they can find a lender who provides off-plan mortgages, as not every lender does.

3. Reserve your property

Once you’ve found your off-plan development, you can pay the reservation fee. This is deducted from the property's total cost.

4. Find a solicitor or conveyancer

A conveyancer or solicitor carries out the legal work involved in buying a property. They’ll help you with everything from identity checks to contract exchanges and completion. It may be beneficial to choose a solicitor who has experience in off-plan purchases.

5. Arrange your mortgage

Your lender usually organises a surveyor’s valuation based on the plans and development specifications to ensure your home is worth what you’re paying for it. Once this is done, they can issue you with an off-plan mortgage.

6. Exchange contracts and pay your deposit

Once the solicitors are satisfied, you’ll need to sign the contract and pay the deposit.

7. Get ready for completion day

Now, it’s time to agree on a completion date with your developer. You may be able to see the house before completion, but check this with your developer first. On completion day, you’ll need to pay the remaining balance on the property, as well as Stamp Duty. When investing in a property, you will usually have to pay an additional 5% on top of the standard Stamp Duty rates.

Key questions to ask your off-plan developer

Here are a few questions to ask your developer before buying off-plan.

General questions to ask your off-plan developer

• Are there any rules around the mortgage broker or solicitor I use?

Developers may recommend mortgage brokers and solicitors, but ultimately, it’s your choice.

• When will the development be finished?

If your new home is part of a larger development, work may continue around it. You’ll need to discuss this with your developer.

• What are the specifications for my property?

Make sure you know exactly what’s included in the sale, from flooring to kitchen appliances. If features are not included, you may be able to purchase them from the developer at an additional cost.

• What documentation should I get upon completion?

Your solicitor should handle this on your behalf, but you should receive copies of all certifications, warranties, and other important documents required for the sale.

• What tax band will my home be in?

You can check the council tax band of different homes on the GOV.UK website, but off-plan properties won’t show up. The developer should be able to confirm your annual council tax bill.

Questions to ask your off-plan developer when buying a flat

• What are the rules of the lease?

Most new build flats in London are leasehold properties. You should thoroughly review the lease with your solicitor and be aware of key details like the length of the lease, ground rent and other charges, and any restrictions that apply.

• Will there be a service charge?

If a new estate is privately managed, the owner is responsible for maintaining shared spaces, and each property will pay a service charge. Make sure this is affordable for you.

We understand there’s a lot of information to go through, so we’ve pulled together more advice on choosing and buying the right off-plan property.

Discover our brand-new homes and flats in and around London. These properties are stylish, energy-efficient and located near excellent amenities, catering to all buyers. We also have unique homebuying offers to help you purchase your first home or sell your existing one.

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