If you’re looking for a future-proof investment opportunity, there are numerous reasons why off-plan property can be a good choice in the current climate.
Looking past headline property price changes, the UK’s regional housing markets, particularly in the north of England, are continuing to perform better than the overall UK level, despite difficult circumstances. Agents continue to report demand outpacing supply, while rental market appetite is also maintaining its growth.
But during times of house price stagnation – which comes after a period of steep acceleration of both transaction activity and property price rises post-Covid – many investors will be keen to seek opportunities that can maximise their profit potential.
Aside from focusing on rental yields, which remain particularly strong in places like the north east, the north west and the West Midlands, many investors are honing in on off-plan property investment as a potential way of boosting their returns even further.
The benefits of off-plan property investment
Off-plan property is basically property that hasn’t been built yet – so this means it is an investment that always involves owning a new-build. You can purchase the property during the planning or construction phase, and will own the property upon the completion of the build.
It is a popular option for homeowners and investors alike, and comes with a range of benefits that can be particularly appealing in the current climate:
- A cheaper way to buy: Because off-plan property involves buying before the project is finished, developers normally offer it at below-market value. If you get in very early, you might even get an additional early bird discount.
- Better capital growth potential: Due to this lower price point at the outset, the prospects of capital growth are stronger than when you buy a pre-existing or completed home. Your property should have increased in value – sometimes significantly – by the time it is built.
- You can sell before completion: This has the potential to save you even more money, and is a favoured option for investors who are more focused on their short-term goals, rather than those who will look to rent out the property. You can sell your unit just before completion, so you may not require a mortgage, and can reap the benefits of the capital appreciation that has already taken place.
- More choice: Because you’re getting in early with off-plan property, you will probably get the chance to select the best available unit. You may also get a greater level of choice when it comes to internal décor, or even layout in some cases.
- It’s probably in a prime location: Developers tend to focus on up-and-coming areas, often as part of wider regeneration schemes, where a lot of investment is expected to arrive over the coming months and years. This can improve the saleability and rentability of your off-plan property once it’s complete.
- It’s a new-build: New-builds themselves come with a range of advantages, such as improved energy efficiency standards, a 10-year builder’s warranty and brand-new fixtures and fittings. These factors are extremely appealing to buyers and tenants alike, and can attract much stronger rents than older homes.
As with any investment, there are risks involved that all investors should be aware of before they make any decisions. For example, not all projects complete at the time they are expected to, as various factors can delay a development. One way to help mitigate this is to ensure the developer has a good track record.
Market fluctuations can affect any property investment, including off-plan property, so it is important to note that capital appreciation is not guaranteed. Investing in an area where growth is predicted and demand for property is high can be a good strategy to lower the chances of prices falling.
How to invest
At BuyAssociation, our team of consultants works closely with established and well-respected developers across the UK, helping investors to purchase off-plan property – as well as completed properties and units – tailored to their needs.
We can secure exclusive discounts for our clients who invest at the earliest stages of development, ensuring that our investors get the maximum benefits from their purchase.
Caroline Marshall-Roberts, CEO at BuyAssociation, says: “In the current economic climate, we are continuing to see huge demand from our clients and investors who are looking at off-plan property investment as a way of maximising their portfolios.
“In particular, places like Stockport, Manchester, Birmingham and Liverpool are enticing investors who are interested in investing in a location with a strong market outlook and excellent rental prospects. We have a number of really exciting off-plan property investment opportunities available at the moment in these areas, and we’re seeing units selling out quickly.”