Investing in Off Plan Property

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Off Plan Property Key Information


Investing in a property before it’s been built, known as off-plan, has become more attractive to investors throughout the UK and overseas. It’s seen as a way to purchase a property at a discounted price ahead of a price rise on completion, essentially giving investors instant equity in the property once completed.

There are many pros and cons for investing in off-plan property, but as the government is keen to get close to their target of 300,000 new homes each year (in order to meet the current, and ever increasing demand), there is no doubt a great opportunity for investors to cash in on this undersupplied market.

(The Financial Times)

It’s not quite the same as purchasing a house, or completed property, but the process is not an overly complex one. Investors generally are required to pay a deposit in order to exchange contracts (typically 20-30%), with the balance of the funds due on completion. Occasionally developers will be required by their finance lender to request an additional payment from investors throughout the development.

The other tools that are making it much easier for investors and buyers to make decisions to invest in off-plan property is the computer generated images (CGI’s), many of which now can be difficult to tell if they are in fact CGI’s and not the real thing.


One of the big advantages is that you are securing the property at today’s market value (possibly less), giving time for a significant increase in the value by the time the development is completed. It is not uncommon for some investors to have made up to 100% growth on the value of their unit between exchange of contracts and completion.

And it’s certainly not uncommon for investors to double their initial deposit during the build period. For example, Investor A commits to buy a property 3 years off plan in Manchester for £200,000.

He puts down a 20% deposit (£40,000)

Growth in the city is approximately 7% per year. Over 3 years is 21%, therefore the value of the unit is now approximately £242,000. He could sell the property, take out his initial £40,000 and a further £42,000 profit.

Of course, there are no guarantees, so it is important to be investing in areas with strong demand, consistent growth potential, and also invest with developers who have financing in place and are not using the investor’s funds to complete the build.


There is a lot of media hype about the North West at the minute, and this is not to be ignored. The predictions by Savills recently suggest that house prices in the north-west will significantly outperform London over the next five years, putting Liverpool and Manchesterat the top of the ‘hot spot’ list year after year.–but-landlords-feel-the-squeeze

The reason for this is the level of investment in both cities generating huge numbers of jobs for the local area, putting further pressure on the demand for high quality accommodation, in addition to rapidly growing universities that are already under supplied with regards to the accommodation for their students.


Many investors think it is extremely complex when getting a mortgage on an off-plan property. This is a myth! It is very possible to take out a mortgage on an off-plan property, although the criteria is different from lender to lender.

A bit of advice…don’t submit a full application until the development is within 3-6 months of completion. Time and time again we see mortgage brokers advising investors to submit an application (as an excuse to charge their fee up front), then when it comes to survey, there is nothing for the surveyor to view as the property is not ready yet.

What we always advise our clients to do is secure a decision in principle (DIP) from the lender – this is essentially the lender doing a quick review of your situation and giving a yes or a no to you. Make sure you declare all of the information they request as you could run the risk of a declined application if you aren’t fully honest about that missed/late loan payment two years ago, or that high credit card balance.

If difficult market conditions mean that the mortgage valuation survey values the property at lower than the price you originally agreed, a second opinion can be sought – although for those smart investors choosing developments in the ‘hot spot’ locations, this risk should be very small, plus the developer and selling agent will/should have sought advice from a local surveyor when doing their initial assessment of the development, prior to launching the sales of the units.
Some investors choose to ‘flip’ their properties, which involves buying at off-plan price, then reselling before completion once the value has risen – this is a slightly risky investing strategy – some clients make a lot of money from it, some clients don’t. You will also need to ensure the contract you have is fully assignable if this is your investing strategy.

Remember, when buying off-plan, always conduct full research into the area, local market, for both rental demand and resale demand. Although it can seem like a daunting process, if you conduct thorough due diligence, the rewards can far outweigh the risks, and by working with an experienced sales agency you should have a very smooth process.

One final thing to remember, property prices over the last 100 years have doubled on average every 7-10 years (this is through 2 world wars, and multiple recessions). The reason for this is simple…the rate at which new properties are built is no way near as high as the rate in which more humans are being added to the earth! Demand V Supply. When the demand is high and the supply is low, and you hold onto the property…you will always win. And even if prices don’t rise as much as that…you’re still renting it out and generating an income!


We are looking forward to hearing from you regarding you next investment. If you would like to talk with us directly you can call us on  +44 (0) 2039507939 or send us an email at If this is your first time landing on Thirlmere Deacon Property Investments I encourage you to visit our homepage to read more about us and to see what we have on offer.

Thirlmere Deacon Ltd

Thirlmere Deacon Property Investment

Thirlmere Deacon Property Investment
4th Floor,
7/10 Chandos Street, Cavendish Square
London, England
+44 (0) 2039507939