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IS 2022 A GOOD TIME TO INVEST IN
OFF PLAN PROPERTY? 

Within the last two years of the pandemic, the property market has had its fair shares of ups and downs. However, it has managed to grow exceptionally throughout 2021 into the new year of 2022. With investments covering stamp duty fees, built in deals offering furniture packs as an added bonus at a discounted rate. The deals for off plan investments is booming.

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So the question is, is it worth investing in off plan property in 2022?

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The short answer, YES. Here is a complete breakdown of why off plan property is a good investment for 2022.

Apartment

Lower Purchasing Prices

The main incentive for an off plan investment is that the cost of buying is lower compared to traditional means of completed apartments or rental houses on the market. You could potentially save tens of thousands of pounds or more depending on the off plan that you buy. With off plan property the sooner you buy the cheaper the costs become in the long term.

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Take Manchester for example. Manchester’s current market for off plan properties has a gross yield of 5-8% annually, rewarding quick buyers, who can use any remaining investments funds to buy multiple off plan properties if they wanted to. There is also added incentives to buying in bulk (discounts off the total cost).  

The only assurances needed rely on the reliability of the builders who are building the off plan properties. When buying off plan developments it is also important that the developer has information surrounding the development for example brochures, floor plans, websites, construction updates etc.

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Larger profit on Capital Appreciation

As developers want to sell off plan apartments and property as quick as possible, they will lower the price in the early stages of the development’s life cycle and in some cases the last few remaining units. This nets the developers a higher net profit when they sell.

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The earlier a buyer purchases a unit the unit gains higher value as time goes on, this is due to real estate being a for of investment. On completion the buyer is free to do up their property anyway they see fit, adding an increase of value to their unit meaning that if they were to sell the unit within the next 5-10 years they would have a higher capital value on the unit meaning they can sell for 2-3 times the price, making a higher net profit which trumps the price they bought it for. As an added bonus the 5-7% yield is profit that you make during the growth/selling process.

 

 

Flexible Payment Strategies

The biggest hurdle when investing in property is down payments. When buying a home there is an emphasised pressure to make a large down payment. With off plan properties there are flexible ways to manage payments. Developers can give weeks even months for you to get the funds to help reduce the load on getting the funds. For example Sourced Invest offer a £2000 exchange fee which counts towards the initial 30% down payment and secures the units you wish to buy. Once the 30% deposit is down then the buyer can focus on getting the funds for the 70% completion. If needed contracted payment plans can be put into place to make sure you are covered. This in turn builds trust between you and the merchant.

 

Key Point Summary

  • Initial purchase is cheaper due to the units being incomplete.

  • Units can be sold before a completion date.

  • Units can be rented if the buyer does not want to buy straight away.

  • A timeline of investment funds can be created meaning you can budget your costs.

 

To find out the latest off plan deals feel free to message us or get in touch at Info@sourcedinvest.com or call us on 0800 249 5600

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