One of the many advantages of purchasing off-plan property is getting in early to get your pick of the best plot, which can generate a higher return on investment.
When investing in off-plan property, unless you enter at a point when the majority of plots or units are already sold, you will be offered a variety of properties to choose from. Depending on your investment goals – as well as whether you plan to live in it yourself or rent it out – will determine which one you settle on.
For property investors buying in order to let the property out, having a target tenant in mind can be important. Price will of course come into the decision-making process for off-plan property purchases, too, as the most sought after plot or unit will often be the most expensive.
This is why investors who get in at a very early stage of the development often secure a significantly better price than the property will finally be worth when the development is complete, thereby enhancing their return on investment in the long run. Plus, being able to choose the best plot will improve its rental and sale prospects in the future.
Premiums on the best plots
When focusing on housing developments, as opposed to apartments, a new study by GetAgent has revealed that a corner plot property can command an average price of up 38% higher than the average home in Britain.
GetAgent’s research shows that while the average British home is currently £289,807, a corner plot property sells for an average of £399,505. Focusing on London, the data showed a huge 81% property price premium on corner plots compared with the average home.
The results varied from region to region, with corner plots in the north west bringing in an additional 44% in the property price, 40% in Wales, and 39% in the West Midlands and the north east. As corner plots tend to have a greater amount of outdoor space, this shows just how much buyers still value this when buying property.
While the data does not look at off-plan property developments specifically, it is certainly a good indicator of how important it can be to invest in the right plot or unit to increase desirability. All investors need to have considered their exit strategy, as well as how much they will be able to charge tenants, too.
Off-plan property choices
For many property investors focused on the buy-to-let market, off-plan flats and apartments are often the most appealing option. They are more likely to entice young professional tenants, and there are numerous ideally located city centre developments underway that make perfect rental homes.
By investing in off-plan property, the buyer is purchasing directly from the developer, often through an agent or property investment consultancy to ensure a smooth process. They will be able to help the buyer choose which plot or unit would best suit their needs and budget.
In recent years, two-bedroom apartments have become increasingly popular and can often bring in better yields for the investor. This is partly due to Covid, as having an extra bedroom can mean an additional space to work from home, but also appeals to those who want to save money by sharing with friends.
When looking at a unit in a new-build block of flats, the view can be important, so it is a good idea to ask what this is likely to be. A property overlooking water, for example, will appeal to more tenants and more buyers in the future than one overlooking a car park, so it comes down to more than just cost when buying off-plan property.
Focus on selling points
Commenting on GetAgent’s findings, Colby Short, co-founder and CEO of GetAgent.co.uk, said: “It pays to know what appeals to buyers before entering the market and the features and selling points that will not only differentiate you from the rest but also help you secure a far higher sold price, even when compared to your next-door neighbour.
“A corner plot property will certainly help you do this and the additional space, parking potential and privacy are just some of the reasons that a corner plot property will be in high demand amongst potential buyers.
“The good news is that you don’t have to be a property expert to maximise your property’s unique selling points. Any good estate agent should both recognise these unique features and advice on the price premium they can fetch in your local market, allowing you to price your property and market it appropriately.”