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Buying an Off-Plan Property

Martha Lott

Written by Reviewed by Graham Norwood

16th Apr 2020 (Last updated on 12th Jul 2023) 13 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 buying 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.

  1. The Process of Buying an Off-Plan Property
  2. 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. Tips for Buying Off-Plan Property
  7. Questions to Ask When Buying Property Off-Plan
  8. Learn More About New Builds

The Process of Buying an Off-Plan Property

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 realistically borrow what you need. They may also suggest a lender with experience of lending on new-build properties. As most mortgage offers are only valid for 6 months, you may find it difficult to locate an appropriate lender alone.

You should also start looking for a suitable development in the area you’d like to move to.

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.

The developer may also conduct feasibility checks to assess your income and ensure you can afford the property. Don’t forget to ask any and all relevant questions to ensure the property is what you’re looking for.

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. As new build conveyancing is slightly different, it would be wise to find a solicitor with experience in handling new-build purchases. Don’t forget to check if the property is freehold or leasehold before starting the process.

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 which will depend on the plans and development specifications.

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. Your solicitor will draw up the contracts and do most of the work on your behalf.

Once the contracts have been exchanged, you are legally committed to the sale and can't risk losing your deposit if you pull out hereafter. Typically, the deposit will be around 5-10% of the agreed purchase price.

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 new build warranty 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. Some developers may only provide you 2-4 weeks notice before the completion date so you should be ready to complete as soon as possible.

Once you have successfully completed, you can commence with the property handover and move into your new home.

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Pros and Cons of Buying Property Off-Plan

Buying an off-plan home means purchasing a property before work is even complete. Due to this factor, there are a number of pros and cons to consider before you buy your off-plan property.


As you will be buying a new-build home, you’ll be the first person to live in the property.

As it’ll still be under construction, you won’t know what the property looks like until it’s finished.

By the time you move in and even potentially sell it, the property could increase in value.

Not many lenders offer mortgages specifically designed for off-plan properties.

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.

It may take the developer longer to complete the property than expected and so your mortgage offer may expire.

It depends on the developer, but you may be able to add personal input and add your own choice of fixtures and fittings.

Depending on how long it takes to finish building the home, it could be a long wait between purchasing the property and moving day.

Many new-build homes will be decorated as neutrally, so it shouldn’t be too difficult to change it to suit your taste.

If you pull out of the sale for any reason, you will lose the reservation deposit you initially paid.

Many off-plan homes come with the opportunity of using a Help to Buy Equity Loan to pay for the deposit. (The scheme has closed in England but Help to Buy -Wales has been extended until March 2025)

If you pull out of the sale or can’t complete the purchase, the developer will have the opportunity to sue you.

Many new-build homes will come with different guarantees such as the National House Building Council’s (NHBC) 10-year warranty.

Many developments come with restrictive covenants, meaning there will be restrictions on what you can do with the property once it’s complete.

You may be pressured into using the developer’s conveyancer.

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 new build 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.

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Tips for Buying Off-Plan Property

Some buyers may shy away from buying off-plan as they believe it can complicate the process. However, it can actually be quite simple and come with a few added benefits. If you’re considering buying a new-build house off-plan, here are 5 tips to get you started:

  1. Get your finances in order - As with any property purchase, it’s important to get your finances in order before making an offer. Speaking to a financial adviser or mortgage broker may help you start the process.
  2. Decide what you’re looking for beforehand - Are you looking to live in the property or is it an investment? Which area are you looking to buy in? All this should be decided before looking.
  3. Do your research - Whether it’s the developer or the local area surrounding the site, always do your research before committing to the transaction.
  4. Find an experienced conveyancer - The conveyancing process for a new-build home, especially one you’re buying off-plan, is different from a typical transaction. Due to this, it would be wise to hire a solicitor who has experience with buying off-plan properties.
  5. Get regular updates on the progress - It’s good to be kept in the loop when buying off-plan. Not all developments will be completed by the initial deadline so you should ask for regular updates so you know what to expect during each stage of the process.

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?

Before committing to the purchase, it’s important to know what the developer’s reputation is like. It’s recommended you first visit their previous developments and take a look at some of the online reviews from previous homeowners. If the homes they built matches up with the images in the brochures, then you can trust your property will be completed to the designs and plans initially shown.

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. It would be wise to bring this up with your mortgage broker before choosing a lender.

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 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 proactive 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 but it’s still worth getting clarification from the developer. Leasehold properties often come with extra charges and limitations which can seem concerning if you didn’t immediately know.

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. The length of the lease for new-builds is typically long-term, often between 90 and 999 years.

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. Always read the contract carefully before signing to ensure there are no misunderstandings of what is included in the sale.

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 to the agreed deadline.

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. Don’t forget to complete a snagging list before completion, so that the developer can remedy any issues or defects with your new-build property before you move in.

Learn More About New Builds

This article is part of our new build homes guide. Next, we will take a detailed look at what a new build warranty is and why it's so important to uncover who your provider is. To learn more, read what is a new build warranty.

Martha Lott

Written by Martha Lott

Having guest authored for many property websites, Martha now researches and writes articles for everything moving house related, from remortgages to conveyancing costs.

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.

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