Housing development is one of the U.K.’s major industries and is likely to be so for the foreseeable future. Right now, not only does the U.K. have a major shortage of housing, some of the existing housing is hugely dated and below standard (often built at high speed in previous decades to satisfy an immediate problem, such as the damage caused by the blitz in WW2).
This means that at any given time, you are probably going to have the chance to buy off-plan property in a new development in pretty much any part of the U.K. Alternatively, you could look for an existing property, which meets your criteria. Here are the two options compared.
The case for buying off-plan rather than existing property
Possibly the single, biggest argument for buying off-plan property is that you often have the opportunity to customize it to your specifications during the actual build process, which can be massively easier and more cost-effective than having to redo work which has already been done.
The second major argument for buying off-plan property is that it is often available at a substantial discount to existing property. There are various reasons for this, one of which being that sales of existing property have to cover the costs of all parties involved in the transaction, including estate agent’s fees, which can be significant, especially if the seller uses a traditional estate agent working on commission.
When you buy directly from the developer, you cut out the “middleman” and hence save yourself some money. You also have the reassurance that the developer is actually guaranteed to sell the property, since it is their job and how they pay their own bills, whereas a residential homeowner can opt to back out of a sale any time before completion, even if it does involve accepting a financial penalty for doing so. Likewise, there are no chains involved.
The case for buying existing property rather than off-plan
Existing property, by definition, is property which has already been built which means that you don’t have to worry about whether or not a developer will complete their build to schedule. When considering this point, it’s worth remembering that even the best developers in the world can have their build schedules thrown completely off course by events which are entirely outside of their control, such as the weather, hence if time is of the essence, a new build is probably the safer option.
Secondly, the fact that new builds already exists and can be surveyed means that it can be a whole lot easier to get a mortgage on it. There are lenders who do offer mortgages for off-plan property so it is possible, and a good developer will probably be able to point you in the right direction. However, the off-plan mortgage market is much more niche than the mortgage market for existing property and therefore you have less ability to shop around and get a good deal.
On that note, you are unlikely to find yourself put under pressure to use services recommended by the seller or their agent as you may be if dealing with a developer.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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