There are many advantages to buying off-plan: a new energy-efficient home, no upward chain, plus a house featuring the latest interior styles and finishes. The 15-20 per cent deposit also means having time to save and pay the rest on completion. Karelia Scott Daniels, from Manse & Garret Property Search, says: ‘You agree a price months or sometimes years before completion, which is great in a rising market as you complete at a price below market value.’
Finance and legal options
Mark Harris, of mortgage broker SPF Private Clients, advises that ‘mortgage offers are generally valid for three to six months, so if buying two years before completion, for example, there’s no point in arranging a mortgage until six months before completion.’ Use an independent surveyor, valuer and lawyer, even if the developers agree to pay legal fees
‘Developers tend to give buyers a two-year warranty covering snagging issues and appliances, and also a 10-year National House-Building Council warranty for the build,’ says Nicholas Ayre, managing director for home-buying agency Home Fusion. ‘Always check that you will receive this.’
Fixtures and fittings
‘Developers offer a choice of fixtures and fittings,’ says Andrew Riddell of Strutt & Parker. ‘With some it is possible to have an input into the positioning of electrical sockets, light fittings, taps and doors, so always check whether this is possible.’ If you want to change the interior layout, there are also usually planning/building regulations that restrict changes. ‘If you buy from a smaller development, then some alterations can usually be made,’ adds Andrew Riddell.
‘Be aware that the value of the flat or house could fall in price during the build,’ says Mark Harris. ‘For example, if you agreed to pay £200,000 for the property but the value has fallen to £180,000 by completion, the lender will base your mortgage on that, even though the developer will still want £200,000. So a contingency fund to cover the shortfall will be needed.’ Nicholas Ayre also advises checking that you get exactly what the developer lists in the brochure, and to envisage what the property, and the view, will look like. ‘I recently looked at a flat for a client where the view out of one of the windows was of several air-con units – not only did they look dreadful, but the noise was deafening, so we ended up rejecting it.’