Is buying off plan still considered an investment?

office_2

Just recently reserved a property recently with the intention of not moving for a long long time. I just wondered if "buying off plan" is still seen as a quick way of making some money on property.

Just out of curiosity really as I remeber a few years ago looking at a flat which was completed was worth quite a bit more.

Thanks in advance.

theGrinch

offplan works in a rising market as was the case in 2002. these days times are harder and offplan has been flogged to many novice buyers surpressing the new homes market. a further handicap is more and more lenders are refused to lend on property less than 12 months old.

office_2

these days times are harder and offplan has been flogged to many novice buyers surpressing the new homes market

Pardon my ignorance but what is meant by novice buyers and supressing the new homes market?

As stated the wife and I, all going to plan, intend this move to be our final but it would nice to think that buying off plan has been an investment as well.

alared

Surely everybody buying a new home is buying off-plan.
Builders try to make the most money out of every plot and release each plot well before the house is actually built.
They love to offer all sorts of fantasy incentives to get you to buy.
You could have two identical houses but they will not be priced or sold for the same amount of money.
A quick example of what happened to me recently, the house was priced at
£217,000,they offered 5% discount,paid the stamp duty,if you don`t want carpets they knocked off another £3k,etc. which took the price to £199,995.
The very price which it should have been in the first place before they added on the FANTASY incentives.
The sales person,when asked how much a house was said there is no actual price,it depends on each persons circumstances.
In other words what the builders can con you for by telling a pack of lies.

office_2

Agreed it is a lottery really what price you pay. For example the property I have reserved is £35k less at another site and £60k more at another. That shows you the difference is nearly £100k depending upon where you purchase basically the same house. Even on the site, I have been informed that the next release of the house types will cost more.

Like most things I guess it is what people are prepared to pay for a property, and at the end of the day if you are happy with the price (which I am) then I would not get to upset about what someone else payed for it.

Although you believe you price was inflated I wish I got £17k nocked of the price, no such incentives at this development.

alared, would you say you property now is worth the £200k you paid or the £217k it was offered originally at? If the latter then all sounds good to me £17k for a little negotiation.

Sorry I am new to this house buying, this is only my second and first new build but the when you get the valuation done is this not what they are checking "that is is worth what you are paying".

Thanks for the info, it is very interestin to hear peoples observations/critisims.

theGrinch

novice = 1st/2nd time buyer or landlord. there are some dubious companies flogging offplan. the fact some reputable lenders are no longer lending on new builds, should make us all think carefully.

the market is surpressed as property is first bought offplan and held, and as soon as the development is completed you start to see these same properties flood back on the market for sale. I know of half a dozen developments where this is the case.

office_2

Thanks for the clarification. It is a Miller Homes development, the company as a whole seems pretty good and I could not fault the service and help so far. So fingers crossed all goes well.

nmiah786

office wrote:

Thanks for the clarification. It is a Miller Homes development, the company as a whole seems pretty good and I could not fault the service and help so far. So fingers crossed all goes well.

Ohh nooo. Didnt Miller Homes buy 4 Dream Property Investment Group a couple of years a ago. 4 Dream were selling off plan properties quite vigourously at over inflated price with 10% - 20% discount which didnt really hold true. Just my observation!!!!

Doozergirl

Locally to me, Miller Homes seem to offer very good value for money when comparing like for like house type with other developers. Prices seem to be a little cheaper and the basic specifications are higher than most too.

You generally expect to pay a premium for a new build house - on a small year old Miller development near me, the houses are currently being resold and marketed for a little less than their final price when they were being marketed by Miller. You're probably paying nearer to the true value for your house than later buyers.

Buying off-plan as an investment with a view to making a killing once the development has sold out is IMO, not a clever idea. But, if this house is your home, then I certainly think it would be better to buy earlier on the development than later. You will pay less than your neighbours.

nmiah786

Doozergirl wrote:

Buying off-plan as an investment with a view to making a killing once the development has sold out is IMO, not a clever idea. But, if this house is your home, then I certainly think it would be better to buy earlier on the development than later. You will pay less than your neighbours.

I agree completely with the above!

Doozergirl

nmiah786 wrote:

I agree completely with the above!

I'm the best

(feeling super-smug coz she got a thanks from MSE Martin today) :grinheart: