Off Plan Property: What You Need to Know

For many investors, buying off the plan is the ultimate way to invest in property. 

By purchasing property that has not yet been completed, you can net yourself some fantastic savings and profits down the line. 

Sounds great, right? 

Well, unfortunately, it’s not that simple. 

There’s a lot of horror stories when it comes to buying property off-plan. There are several things you need to consider before making your investment to ensure a successful one. 

Buying off the plan doesn’t have to be scary. With some research and knowledge, you can make the best investment possible with off plan property. 

What Is Off Plan Property? 

Off plan property is a property that has not yet been completed but can still be purchased. This means a property that is still in the planning or development stage. 

This, naturally, can sound very risky.  

After all, it’s not often you invest money in an asset that is essentially not there yet. 

However, buying off the plan has some extraordinary benefits attached that make the risk worth it. 

These benefits have started to attract many investors, with off plan property and new-build properties becoming increasingly popular over the last few years. 

It’s no longer rare to see homebuyers visiting showrooms, with more and more new build properties being built across the UK. 

In fact, in 2020, the number of new UK homes registered to be built hit a 13-year high 

How Does Buying Off the Plan Work? 

Buying off the plan is very similar to traditional purchasing methods. The added benefit though is you will be able to see how a property looks beforehand. 

You can do this through the help of computer-generated imagery, or even a virtual reality tour.  

Naturally, many investors are hesitant about purchasing property they can only see online, but the benefits to off plan can outweigh these shortcomings. 

With that in mind, let’s look at reasons why investing in off plan property is becoming such a popular choice in 2021. 

Benefits of Buying Property Off Plan

Negatives of Buying a House Off Plan

A 10 Step by Step guide to Buying Off the Plan 

1. You pay a reservation fee, typically valued between £1,000 and £5,000. This is usually deducted from the deposit.  

2. Hire a conveyancer or solicitor to handle the legal process. This includes local searches and looking at contracts. If you invest with a property investment company, an experienced solicitor will usually be offered to you who is well-versed in the property market.  

3. Once the legal process is done, you will pay the deposit for the property and exchange contracts. After this, you can no longer back out or will lose your deposit.  

4. Monitor the progess of the development and arrange a mortgage if you need one for your investment.  

5. Depending on the property, you can pay for a snagging survey to check for any defects on the property. 

6. Get ready for completion. The developer will usually give you two dates; the short stop and long stop. The former is when the developer expects to finish, and the long stop is when the developer must be finished. 

7. Upon completion, the developer will service a notice to complete, providing you with a set amount of time to complete the purchase. 

8. You will pay the remaining fee for the property. 

9. The property is yours! 

10. Use the services of a property management company to find and manage tenants. 

Types of Off Plan Investment 

When looking at off plan investment, there are some top options to consider. With both residential and student property investments available, and each making a potentially excellent investment, you may be confused about which route to take. 

Residential Off-Plan Property  

Residential property is the most basic form of buy to let. 

Here, you can buy a property with the intent of renting it out to a tenant. This target can range from any age and occupation. 

Traditionally, young people tend to rent more and will likely want to rent flats and apartments in city centre locations. 

Younger people tend to want properties that are more environmentally friendly, have easy access to amenities, and are more affordable. 

This is important to consider when purcashing properties. If you want to target this tenant group, you will want to invest in a modern property with ideal amenities.  

However, more old people are starting to rent, too. There are around 400,000 people aged over 60 who are living in rental accommodation. This is a 60% increase since 2007, with a predicted third of over 60s renting by 2040. 

Older residents will likely want a more rural location with suitable transport links and access to green space. 

It’s important to consider your target tenant and the location, as it will directly impact what property type you invest in, whether that be an ultra-modern city centre apartment, or a sizeable home on the outskirts of a city. 

Student Off-Plan Property 

Another form of property you may be interested in is student buy to let property. 

Student buy to let is identical to residential buy to let, except you will only target one tenant group – students. 

Whether that be through purpose-built student accommodation or House of Multiple Occupancy, student buy to let is an excellent form of property investment. 

Prices for property tend to be cheaper for students, due to their smaller and more compact designs, which result in higher rental returns than traditional property forms. 

The trade off is you will have a smaller tenant group to target and will see less capital growth than other residential properties. 

Regardless, it’s important to deliver properties students find appealing. This will mean providing modern properties located in the city centre, with easy access to university campuses, restaurants, and other popular amenities.  

Where to Invest in off-plan property? 

Now that we’ve covered reasons why you could invest in off-plan property, and types of property worth buying, let’s look at exactly where to invest. 

To evaluate an area, it’s important to consider a few factors. These are; affordability, market growth potential, rental yields, and tenant demand. 

Considering all these factors, the North West, including Manchester and the Liverpool property market is the best place to invest in the UK in 2021. 

Alongside the highest growth rates in the country of 28.8% by 2025 (7.7% higher than the UK average), the North West also leads in other factors. 

Here, the average rental yield is 5.1%. It gets even higher in cities like Liverpool and Manchester, too, which have rental yields of 6.4% and 6.3% respectively. 

For context, this is considerably higher than both London (4.0%) and the UK as a whole (4.4%). 

Alongside these returns, the North West boasts affordability and high tenant demand. 

Liverpool and Manchester have a combined total of over 170,000 students. Moreover, the current ratio between housing supply and demand for property in Manchester is around 1:5. 

Despite these huge levels of demand, property is still affordable here. Liverpool property investment has average house prices of just over £155,000. That’s about 400% lower than the average in London. 

Manchester prices are also lower, and are around £45,000 cheaper than the UK average. 

If you want to invest in off plan property, it’s worth considering the North West for your investment. 

How to Make the Most Out of Your Off Plan Investment? 

It’s widely considered that there are two ways to handle an off plan property investment as an investor. You can either a) keep the property or b) flip the property if you have more experience.  

House flipping is an increasingly popular form of property investment for those with vast expertise in the market. 

It involves purchasing a property that is typically undervalued and then selling it on quickly for a profit. This can include repairing and upgrading a disused property or holding onto it and then selling. 

So, how does house flipping work for off-plan property? 

Let’s say you’ve identified a property that’s worth around £200,000. You will pay a deposit to secure the unit, which can be as low as 10% but can range to higher levels. 

With a 10% deposit, that means you’ve paid £20,000 up front. 

Fast forward 12 months, and the property is still under construction but the surrounding area is having a property market boom. All of a sudden your property is worth an extra £20,000 in this new market. 

If you want to flip your house, there’s two things you can do here. 

You can either wait until completion and then sell the property on for the extra profit, or sell it on before it’s completed to another investor. 

Here, they may pay you £40,000 for the right to buy the unit. In practical terms it means they’re paying the current £220,000 worth of the property as they anticipate the price will continue to rise. 

This £40,000 fee will cover your initial £20,000 profit, and will give you a 100% return on your investment. 

This methods sound great, but it isn’t recommended you opt for this route. 

Firstly, flipping your property is only suited for cash buyers, with mortgage lenders unlikely to supply cash for this type of investment. 

Secondly, you won’t be able to take advantage of any future capital growth rates or regular rental income.  

The latter is one of the main reasons why proper investment is so good, which is why the next option is recommended for a successful off-plan property investment. 

Checklist: Things to Keep in Mind When Buying Off the Plan 

There are no doubt plenty of questions to ask when buying property off plan. With that in mind, here are some things to consider when buying off plan property. 

  • Research the area: Check if the area has strong tenant demand and capital growth predictions. 
  • Think about your tenant: consider what type of tenant you’re targeting and what they will want out of their property. 
  • Assess finances options: See if you’re eligible for a buy to let mortgage or other loans. 
  • Conduct due diligence: Check how good the developer behind the project is. View Trustpilot reviews and check out their track record and portfolio. 
  • Invest through a investment company: Choose an investment company to invest with to get further deals and discounts. Some companies will offer free furniture packs worth upwards of £5,000. 


Take a look at some common questions to ask when buying property off plan. 

Looking at Buying Property Off Plan? Invest Today 

If you want to invest today and are thinking of buying property off plan, then why not do it with us? 

We are ELEMENT developments, one of the best off plan property developers in the business helping to revolutionise residential living with our brand-new highly sustainable eco properties. 

We specialise in residential off plan developments, and have already sold out phases 1 and 2 of our exciting ELEMENT – The Quarter in Liverpool. 

Our prices start from just £99,950 with massive assured returns of up to 8%. 

If you want to find top off-plan property for sale in the North West, then we are the developer for you. 

Enquire now for off-plan property for sale and get access to exclusive deals only with us. 

Start your property journey today with ELEMENT and help save the planet. 

The future of residential living is now. 

Also, be sure to check out our other detailed guides, like our in-depth look into Manchester property investment.