Buying off plan - pros and cons

simonineaston

You jolly folk out there in MSE Forum-land have probably got lots to say about the benefits or otherwise of buying a new property before it's actually been built. I'm liking the look of a lot of the new build apartments here in Briz'l and wondered what sort of experiences you guys have had? A chum bought a house over in Keynsham and is really pleased - sez the builders have been really helpful with snagging - another friend bought an new build apartment in Bath some years ago and said it was a nightmare... what do you folks think?

AnotherJoe

Its very risky. There can be big gains, or big losses.

Snagging and quality of build is an irrelevance as to off plan or not, things to worry about are;
Property prices fall - you are locked into buying at top of the market.
Builder goes bust - where's your deposit??
Significant delay in build - Can you pull out without loss?

The upside is obviously that you are locked into today's prices, if prices continue to rise thats a win, you can even sell without ever occupying. How likely large price rises are for the next couple of years I have my doubts, though i know property in Bristol is at a premium.

TadleyBaggie

We bought the third house of three being built, when it was just at the foundation stage.

The good part is we were able to change the layout of the kitchen and other stuff. The bad part was the build wasn't finished at the point we had to complete and had to live in the house for a few days without power and heating (this was in a very cold March). And because it was the last house to be built, getting the builders back for snagging items was very hard.

Cakeguts

I think it works better with houses than with flats.

eddddy

simonineaston wrote: »

Buying off plan - pros and cons

Do you mean you will be paying the developer a big lump of cash (and committing to purchase) a long time in advance?

If so, there are many risks to think about. A few of them include:

- The developer goes bust (and you lose the cash you paid)
- The developer does a runner with your money

If you'll eventually need a mortgage, the risks are much, much bigger, for example:

- You can't get the mortgage you need because:

---

The bank value the property at way below what you are paying

---

You lose your job


Worst case scenario might be...

- Property prices tumble over the next few months,
- the flat loses say £50k in value
- therefore, the bank won't give you the mortgage you need
- therefore, you cannot complete
- therefore, the developer sells to someone else for £50k less
- therefore, the developer sues you for £50k in damages

simonineaston

I may have got the wording wrong in the OP - I said "buying off plan", when the circumstances are this: There is a development of apartments here in Briz'l that is part-way through its construction. Phase1 and 2 have been built and occupied, phases 3 4 & 5 are in various later stages of completion. Crest Nicholson, the builders, appear to be selling the later phase apartments now - or at least taking funds as a deposit...
sorry if I've misled you!

AnotherJoe

Off-plan means, there's not even a muddy field, its just glossy brochures.

So you are just buying a new flat. Nothing unusual at all then ! Main glitch is, sometimes a long wait between exchange and completion, will your mortgage offer last that long.

teddysmum

Our house was a new build, over 40 years ago, but we would have not considered buying without seeing its situation, relative to other properties 9difficult to picture from a drawing.). It wasn't complete, but there were only things like doors, floor tiles, kitchen units and fireplace tiling to be completed.


Unless there is a show house of exactly the same design, it is also difficult to picture the layout, relative sizes of rooms and storage availability, though show houses do cheat by using speciallly undersized beds etc.

parking_question_chap

AnotherJoe wrote: »

Snagging and quality of build is an irrelevance as to off plan or not

Disagree

Buying off plan you dont know what the developers are going to bodge and to what extent. Buying a property that has been built has two rather distinct advatages; Firstly you can see with your own eyes the structure of the building and you are able to instruct a full survey by a professional prior to advancing too far along the process.

Victor_the_Gink

Is it in the Paintworks? I walk past every day. It looks like Phase 1 is occupied, actually when I'm on my way home I'll take another look as Phase 2 may be as well now. I wonder if it's possible to have a chat to someone that lives there?

simonineaston

Victor_the_Gink wrote: »

Is it in the Paintworks?

That's the fella! Have been to the show home with a chum and liked the design (upside down duplex, with kitchen/living rooms above bedrooms...) but there's similar new apartments popping up all over the place, here in Briz. Forget I ever said the phrase 'off plan"...