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Does anyone here in UK rock up to a building site, or piece of land prior to being a building site, and buy a house “off plan” – not very often. So why, given all the warnings and publicity do people still buy off-plan when in a foreign country, about whose property market they know very little?
Why not look at villas and apartments already finished and inspectable? -
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buying ‘off plan’ might not seem so atractive now, but in boom time, 4-5 years ago, on CDS, i considered buying a property in the november of one year, by the time we did put a deposit down, only a few months later, the prices had risen by several thousand pounds, so it seemed a pretty good bet. The ex- snooker player ‘willie thorn’ was on our inspection trip with a lawyer, and got the ‘go ahead’ as far as i know?, so it all seemed a reasonable gamble to take, and prices then were going up much faster on CDS than anywhere else, including england!
So here i am 4 years down the line, still waiting for a completion date, ‘crystal ball anyone’?
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I think we were intending to purchase something which was built when we went on our inspection trip. We soon realised detached properties (ie. villas) were far more expensive than we anticipated. We have a friend who has villas in the Costa Blanca and to purchase similar property in the Costa del Sol didn’t seem achieveable.
At the property exhibition there were re-sales available but it was very clear (in retrospect) that the company we bought through guided us to off-plan. Examples of property price increases between deposit and completion were also heavily pushed which wasn’t possible on re-sale.
So, the ability to own something in a few years’ time and for it to have increased considerably in value in the process, is what tempts a lot of people.
With the hopeful completion tomorrow on our townhouses and for us to be moving down to Spain in the next month, we wait to see if it was a good thing to have done. Still, everything appears better in the sunshine, doesn’t it!
Kind regards.
Allyson -
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It seems like more and more developers here are not building up to spec. This is whats causing such agro with my place even though having completed.
What I did notice though was an agent trying to sell me a townhouse offplan that is due for completion in 2007. The drawing plans looked great, spacious etc.
When my husband and I drove down to the land itself out of curiousity the plot size of each house was marked out in white paint and looked very small. Those who have already bought into this scheme and havent been down to look at the plot might be in for a shock when they see the final construction.
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Hi agree with AAA in our area in Uk we have so many new developements marketed “off plan” with really low prices to set the ball rolling which of course helps the younger ones first buy its a great idea in principal. As soon as they are up the people are moved in and live along side the buiding work. I don’t know of any developements that wait for all the houses to be finished before marketing them . They just couldn’t afford to do it.
We bought off plan in Spain three years ago and yes were still waiting for completion and when we first looked at the site many of the houses were well under way. We were offered a good purchase price and a house in 13 months which suited our finacial situation at that time (stage payments) I wouldn’t buy off plan again . When things go wrong , sh-t really hits the fan and we have found this all the way through our purchase.
Axwhale
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People buy off-plan because they fall in love with a dream. Its easy to sell from a glossy brochure where every apartment block is termed “luxury” everything they look at thats completed doesn’t live up to this dream unbuilt one. Another reason is that they think it will increase in value, if they do, so do the resale properties and you could have been enjoying your purchase for at least a couple of years.
Strange that people who post on here for info’ still decide to go ahead after reading all the posts…they always think the one they have chosen will be different. I wouldn’t even buy off-plan in the UK even though its not as bad as here.
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@katy wrote:
still decide to go ahead after reading all the posts..
If people acted on everthing that they read on here they would not buy any property, whether off plan or resale.
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I think the main difference between buying off-plan in the UK compared to say Spain and other countries is that in the UK you only have to put down a maximum 10% deposit to exchange contracts and in Spain you have to make stage payments which finances the build.
This means that generally the UK developers are more financially ‘stable’, (unlikely to go bust or cause problems during construction), whereas we all know that many Spanish off-plans are ‘cobbled’ together by individuals who become the ‘promoters’ and use plain old builders, so more chance of problems and going bust. There are some large companies though, but even these seem to be more problematical.
Some Spanish developments are switching to the UK system probably due to the sluggish market, so refuse any off-plans with stage payments in Spain, walk away from them, they are only loaded in favour of the agent, developer, and lawyer (the incestuous triangle!)
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Off plan sounded too dodgy to me when I was house hunting. I preferred to put my money into something that already existed even if it was a resale.
I’m beginning to see the incestuous triangle Paul speaks of exposed, but how unfortunate this only becomes visible to most of us after getting into a dodgy predicament.
It seems like the only chance of covering your back is to do an intensive study course in property-buying before even walking into an estate agents.
What a shame that so many people seem to be so distrustful of lawyers these days, who we all take to be on the right side of the law – naturally; but then again you get corrupt politicians and what not in govt so perhaps it’s not so surprising?
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In the past when prices were rising you could have profited from buying off plan, but I would be very cautious in todays climate, you could be left holding a property you didn’t want, with a value of less than what you paid, with the prospect of paying more stage payments than what you planed. Just be careful.
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If you purchase off plan and resale to a point, remember to use your brain. A lot of ppl in here are quick enough to comment when it goes wrong but im sure they were the sheep went beginning the purchase procedure, did you ask for… bank guarantees, 10 yr building licenses, title deed insurance, and the agencies API number…. if you did do that then you have reason to rant and rave… if u didnt then they saw u coming im afraid… do your research guys.
Also ask, if the developer is late to complete then how much comp will i be receiving, isnt it usually the amount of rental income you could have earnt per week if the prop was completed on the given date…. yes it is, thank you.
As I said, be vigilant guys
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Had inspection trip with the company you mentioned. Didn’t buy.
They never left our side (even at breakfast) pushy would be a mild description for their behaviour – put us off so called cheap trips immediately. There is no substitute for booking your own travel arrangements and accommodation – then call in at their offices if you think they can be of help.
You will be “classified” as a “steamer” (under your own steam) – they can be more polite and less aggressive if they know you are not “already hooked” into their system. No promises though!!
Good luck
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My husband and I bought off plan in North Devon 3 years ago and the build was delayed by over a year – best thing we ever did, during the time from reservation to completion, the real value of the property went up from £225k to £325k. We were buying it as a holiday home to rent out, so it did not matter to us about the delay, but for the people who were going to live there permanently it was obviously a major issue. We have also bought off plan in the CDS, ready for completion this month, a bit late, I think, but again as we are not planning to live there, it doesn’t matter to us – whether or not it turns out to be a success, we can’t tell yet! Lots of serious property investors buy off plan – you just need to do your own homework first, check the builder, etc.
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