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Buying an Off-Plan Property

Written by Reviewed by Graham Norwood

16th Apr 2020 (Last updated on 19th Jun 2020) 11 minute read

Buying off-plan is when you purchase a new-build property before the developer has even finished building it - and with some properties it’s possible to buy at a discount before construction work has even started.

Buying a property off-plan comes with a variety of risks, but it can mean a smaller deposit of 5% or more and an opportunity to get some customised elements, such as non-standard fixtures and fittings - a kind of ‘thank you’ from a house-builder for you committing to buy at such an early stage. 

It can especially have its advantages in a market where house prices are rising and demand is high. Due to the difficulty of getting a mortgage for the off-plan property, the buying process can be a little complex so it’s important to do your research before committing to the purchase.  

Compare My Move work with the most professional property experts out there to help keep our users informed throughout the buying process. This guide will discuss the process of buying an off-plan property and how it will affect your chances of getting a mortgage.

This article will cover the following:
  1. The Steps Involved When Buying Off-Plan
  2. The Pros and Cons of Buying Property Off-Plan
  3. Getting a Mortgage When Buying Off-Plan
  4. Exchanging Contracts Off-Plan
  5. Stamp Duty and Buying Property Off-Plan
  6. Questions to Ask When Buying Property Off-Plan
  7. Saving Money During the Buying Process

The Steps Involved When Buying Off-Plan

With government schemes like the Help to Buy Equity Loan only being for new-build homes, it’s likely that this trend of buying off-plan will continue to rise. However, buying off-plan isn’t always a straightforward process and obtaining a mortgage can be difficult. To help you begin your research, here are the steps involved when buying off-plan:

1. Speak to a Mortgage Broker

First, find out if you’re able to buy off-plan by speaking to a mortgage broker who can check to see if you can borrow what you need. 

2. Reserve a Home

Once you’ve found the perfect home and development for you and you know you can afford it, it’s time to reserve it. To do this, you will have to pay the reservation fee which can be up to £1,000-£5,000. This amount will usually be deducted from the deposit you pay later.  

3. Find a Conveyancing Solicitor

Now is the time to get legal help. Compare conveyancing quotes and appoint a solicitor or conveyancer to handle the legalities of the sale. Don’t forget to check if the property is freehold or leasehold. 

4. Arrange a Mortgage

Find a suitable mortgage lender and start your application for a new-build mortgage. It would be wise to speak to a mortgage broker to ensure you get the best deal for your situation. Your lender will then likely organise a valuation on the property. 

5. Exchanging Contracts

This is the step where you need to complete the necessary paperwork, exchange contracts and pay the deposit. This can happen quickly with new build properties as developers are keen to seal the deal - it usually occurs  28 days after paying the reservation fee. Once the contracts have been exchanged, you are legally committed to the sale and can risk losing your deposit if you pull out hereafter.

6. Wait for the Home to be Finished

You may have a long wait until your home is built. You will have access to the property if required but you do not have to move in whilst it’s still under construction. In the weeks before you complete, it would be worth getting a snagging survey conducted to check for defects. Make sure the home is to your standards and that it’s worth the price you paid for. Almost all new homes have a 10 year warrantee for buyers’ peace of mind but it is sensible to raise any quality problems with a developer, even before you move in.  

7. Completion 

The developer will likely give you two dates for when your home will be ready. The short-stop date is the day the property is expected to be ready whilst the long stop date is when they have to complete by. 

The Pros and Cons of Buying Property Off-Plan

Buying an off-plan home has advantages and disadvantages: 


  • You will be the first owner - as you will be buying a new-build home, you’ll be the first person to live in the property.
  • It could increase in value - by the time you move in and even potentially sell it, the property could be worth more than what you initially paid. 
  • It’s often cheaper - buying off-plan is often cheaper as the home is not yet complete. You could get a discounted rate and still get a good plot. 
  • Provide your personal input - it depends on the developer, but you may have a say in the design and be able to add your own choice of fixtures and fittings.
  • Cheaper decoration costs - if you can’t add your own input, know that many new-build homes will be decorated as neutrally as possible and so it shouldn’t be too difficult to change it to suit your taste. 
  • Help to Buy Equity Loan - many off-plan homes come with the opportunity of using a Help to Buy Equity Loan to pay for the deposit. 
  • New-Build warranty - many new-build homes will come with different guarantees such as the National House Building Council’s (NHBC) 10-year warranty. 


  • You won’t know exactly what it looks like - as it’ll still be under construction, you won’t know what the property looks like until it’s finished, although you should have been shown computer graphic images to indicate how it will look.  
  • Difficult to get a mortgage - not many mortgage lenders offer mortgages specifically designed for off-plan properties.
  • Mortgage agreements are often only valid for 6 months - if there’s a construction hitch, it may take the developer much longer to complete the property and so your mortgage offer may become invalid, meaning you have to re-apply. 
  • A long waiting time to move in - depending on how long it takes to finish building the home, it could be a long wait between purchasing the property and moving day. It could even take over a year, especially if the project is delayed. 
  • You can lose your reservation deposit - if you pull out of the sale for any reason, you will lose the reservation deposit you initially paid. 
  • There’s the chance the developer can sue - if you pull out of the sale or can’t complete the purchase, the developer will have the opportunity to sue you. 
  • You may be pressured into using the developer’s conveyancer - you do not have to take their recommendations. You should and are allowed to compare conveyancing quotes before choosing a conveyancing solicitor. 
  • It may have covenants - many developments come with property covenants, meaning there will be restrictions on what you can do with the property once it’s complete. 
  • The developer could go bust - if something were to go wrong with the housing developer, you could lose out on both the home and your deposit, although this is rare.  

Getting a Mortgage When Buying Off-Plan

When buying a property off-plan, many developers will want you to have a mortgage agreement in principle before you exchange contracts. However, this can be difficult. 

The majority of mortgage offers are only valid for 6 months. But when you purchase off-plan, you might be reserving the property for a year or more until it’s complete. This means that you would have to re-apply for the mortgage.

Luckily, there are many mortgage lenders who now offer longer offer periods to help those buying a new-build off-plan. Some new-build applications will offer a 12-month period as standard, whilst others will allow you or your mortgage broker to apply for a 6-month extension. To avoid confusion, try to get a clear timeline from your developer.

However, you should still try adding a “get-out” clause to your contract before you exchange to ensure you can have your deposit returned if you’re no longer able to get funding and continue with the purchase. 

Keep in mind that your lender will want to do a valuation when you’re first offered the mortgage and then again once the building is complete. If the valuation is then lower than the purchase price, you will have a shortfall and should either challenge the valuation or negotiate the purchase price with the developer.

Exchanging Contracts Off-Plan

Many developers will insist that the exchange of contracts will take place 28 days after you pay your reservation fee. Use this as a basic timeline to help you stay organised as, by this time, you should have already instructed a conveyancer to begin the conveyancing process.

When comparing conveyancing quotes, don’t forget to find someone who has experience working on new developments and preferably, with clients buying off-plan. You don’t have to choose the solicitor the developer recommends, you can still shop around before deciding.  

When you exchange contracts, you will be asked to pay the deposit on the property, which can be from 5%-5% of the purchase price. 

This step in the process is when you are legally committed to the purchase and are the legal owner. If you have any issues, you should discuss them before exchanging. You should also discuss with your conveyancer if you’d like to include any “early get outs” in the contract to support you if the build is delayed.

Stamp Duty and Buying Property Off-Plan

You will still have to pay stamp duty when buying off-plan. However, the rate you pay will be based on the purchase price and not the market value. 

This means that the amount you pay will be based on the price you agreed with your developer back when you reserved the property.  

Keep in mind that you won’t have to pay stamp duty if you’re a first-time buyer buying a home under £300,000 in England and Northern Ireland. First-time buyer relief has different requirements across the UK so it’s important to research beforehand so you know how much you’ll be expected to pay.  

To help you work out how much you have to pay, you can use our Stamp Duty Calculator here.

Questions to Ask When Buying Property Off-Plan

Before committing to purchasing a property off-plan, don’t forget to first do your research and ensure you can afford it. To help you begin, here are a few recommended questions to ask when buying off-plan:

1. Can I see the developer’s previous work?

It’s important to know what the developer’s reputation is like. Visit their previous developments and take a look at some of the online reviews from homeowners. See if the previous homes they built match up with the images in their brochures. 

2. What will happen if the value of the property falls after exchange?

This could affect your mortgage offer so you need to understand what will happen if this occurs. 

3. Is there potential for me to get a deal?

Some developers will be willing to negotiate a deal, particularly at the start of the project when they have to sell properties to fund the development, or at the very end of a development when they want to complete work on a site. If you are an investor or cash buyer, you are more likely to obtain a better discount. With some deals, you may not get a reduction on the asking price, but you could get some cover with the stamp duty or some fixtures and fittings thrown in. The emphasis is on the buyer to be pro-active and suggest a deal - the house-builder is unlikely to suggest a deal themselves.

4. Is the property freehold?

Most new-build houses will be freehold. Leasehold should only be for flats. 

5. Can I see the lease?

If you’re buying leasehold, it’s vital you see the lease before buying the property. Go through the lease with your conveyancer as soon as possible and pay attention to the length of the lease, any restrictions mentioned and also the ground rent. There have been controversial cases of ground rents rising rapidly year-on-year, although this is now far less common than in the past. 

6. What will be included in the price?

Check the contract for any hidden fees. Ask what will be included in the price and if you will be required to pay for any extra fixtures and fittings or even garden turf.

7. Is there proper protection in place?

Talk to your conveyancer and ensure that the developer has insurance to protect you and to safeguard against them going bust. It will also help your case if they fail to finish the development. 

8. Can I see the property before completion?

You will want to be reassured of when you can go visit the property once it’s finished. You’ll want to ensure it’s been finished to a good standard before you take ownership and so you should check if and when you’ll be able to see it. 

Saving Money During the Buying Process

Whether you’re buying off-plan or a previously owned home, it’s important to find the right professionals who can help ensure a smooth and organised process. Buying off-plan can be particularly complicated and so don’t forget to compare conveyancing quotes to ensure you hire a conveyancer experienced enough for the job. 

From verified property surveyors to reliable removal companies, Compare My Move can connect you with the most trustworthy professionals in your local area. All you have to do is fill out our simple online form and you’ll be on the move in no time!

Zenyx Griffiths

Before Compare My Move, Zenyx once wrote lifestyle and entertainment articles for the online magazine, Society19 as well as news articles for Ffotogallery.

Graham Norwood

Reviewed by Graham Norwood

Property Journalist and Editor,

With over 15 years of experience in residential property journalism, Graham is currently the editor for both Estate Agent Today and Letting Agent Today.