Off-plan means buying a home before it is finished, on the basis of plans, specification and the developer's track record. It is how a large share of new UK city-centre apartments are sold, and the process differs from buying an existing property.
How the process works
A buyer reserves a specific unit by paying a reservation fee, which takes the property off the market while solicitors are instructed. Across the developments we currently work with, reservation fees typically sit between £2,500 and £5,000.
Contracts are then exchanged, usually within 21 to 28 days, at which point the deposit becomes payable and the purchase is legally binding on both sides. Deposits across our current pipeline range from 10% to 20% of the purchase price, occasionally with a further staged payment before completion.
The balance falls due on completion, once the building is finished and the developer's solicitor serves notice. Most buyers arrange finance in the months leading up to that date, based on a valuation carried out close to completion.
Why buyers choose off-plan
Pricing is fixed at the point of exchange, so any movement in value between exchange and completion accrues to the buyer rather than the developer. In a rising market that can be meaningful; in a falling one it works the other way.
Early releases usually offer the widest choice of aspect, floor level and layout, and often the keenest pricing of the scheme. Buyers also acquire a new building with a warranty, modern specification and low maintenance liability in the early years.
Capital is staged rather than committed all at once, which suits investors building a portfolio over several years.
What to consider before reserving
Check the developer's delivery record and the identity of the main contractor. Ask about the warranty provider and the longstop date, which is the latest date by which the developer must complete.
Read the tenure, service charge estimate and ground rent carefully, and ask your solicitor to explain what happens if completion is delayed.
Treat projected yields as indicative. They depend on achieved rent, void periods, management fees and service charges, none of which are fixed at the point of reservation.
Plan finance early. A mortgage offer obtained at reservation will usually have expired by completion, so most buyers need a fresh application closer to the date.
This article is general information, not financial, tax or legal advice. Always take independent advice before committing to a property purchase.