Buying Off-Plan: What You Need To Know

Buying off-plan is quickly becoming the norm for home buyers and property investors alike. As high-quality developments spring up across the UK, agreeing to buy during the construction stages is widely viewed as a smart way to access the properties in prime locations.

This isn’t always the case. While there certainly are instances where buyers win from taking the initiative on new builds, off-plan property has plenty of drawbacks and risks that can leave you out of pocket.

What are they, exactly, and how can you avoid common pitfalls? As experts in off-plan property, Liquid Expat Mortgages have a few tips to help you proceed with caution:

Stricter mortgage criteria

Lenders are often more reluctant to approve a mortgage for an off-plan BTL purchase. The developer’s credibility and track record is taken into consideration during the mortgage application process since the aftermath of the 2008/2009 financial crisis.

As overseas investors face stricter criteria than UK residents anyway, it’s absolutely vital that expats and foreign nationals consider opportunities carefully. Looking for properties that have healthy rental yields in areas with good house price growth, and being able to forecast rental income, will ensure that lenders take your application seriously.

Delays to the completion schedule

There are so many moving parts in the development of a new scheme; delays to the completion schedule are common, which can wreak havoc amongst buyers. A mortgage offer is only valid for up to six months (this varies by lender), and while some allow extensions, you might find yourself having to start the application again if your offer expires.

The risk of losing out entirely

In the very worst-case scenario, there’s a chance that your property won’t ever reach completion. Doom and gloom though this sounds, many developers went bust before their projects came on-stream following the 2008 crash. Market conditions may have changed considerably since then, but it’s important to consider that not all developers are of the same calibre.

For this reason, it’s vital to ensure that the schemes you explore are being led by reputable developers with a proven track record of delivery. As experts in off-plan property, Liquid Expat rigorously vet our partners, and work only with the most established developers when recommending investment opportunities to clients.

Our team, consisting of both mortgage and investment property consultants, specialise in UK BTL mortgage finance. We’re perfectly placed to advise not just on the off-plan property purchase itself, but also on the timescales and best course of action for sorting out your expat mortgage.

For more information about off-plan developments or BTL mortgages, call +44 (0)161 871 1216 or email today.