Buying off-plan is something many people shy away from because they feel it's a complicated process that is best left for people with a lot of property experience. The truth is it’s really simple and can be a very intelligent investment. Here are 10 steps to purchasing an apartment off-plan.
1. Speak to a financial advisor before you do anything
You won’t be able to get a mortgage offer until about six months before completion, however it depends on which lender you use. A financial advisor will give a good steer as to what can be borrowed and when you should begin the formal application process.
2. Decide what your aims are
Are you looking to live in the property or is it an investment? If it’s an investment, are you looking for a solid rental yield or long-term capital growth, or both?
3. Find an appropriate development and then select the right apartment
There are a huge variety of locations and price points available. Our specialist residential development sales team based in Margaret Street, London, will be able to help you select the perfect product to suit your needs.
4. Pay your deposit
Once you have agreed a price, you will need to pay your reservation deposit which takes the apartment off the market and goes towards the purchase of the apartment. You will also need to fill out a reservation form and appoint a solicitor. If you do not have a solicitor, there is often a suggested solicitor who is familiar with the specific process for that development, which can make exchanging contracts simpler.
5. Let the solicitors do their job
The exchange process usually takes around 3-4 weeks.
6. Time to exchange
You will usually be required to put down 10 per cent of the purchase price (minus your deposit already paid). Depending on the development, there may be further staged payments due before completion.
7. Watch and wait
Now you can sit back and watch the building going up, and your apartment being constructed. The developer will often send updates during this period to let you know how construction is progressing.
8. Get your mortgage sorted
After you have exchanged, check with your financial advisor when you should start your formal mortgage application process. It depends on the lender but generally it is around six months prior to completion.
9. Preparing for post-completion
If you are thinking about letting the property, speak to our Residential Development Lettings team to make sure you are prepared. The team will be able to help you furnish the property and pre-let it for you so that you have a tenant in situ from day one.
When your apartment is ready, you will be sent a completion notice telling you how long you have to complete on your purchase - usually about two weeks. You just need to let your mortgage company know and your solicitor will do the rest. You will be able to collect the keys on the day of completion.
Contact Savills Private Finance or Savills Residential Development Sales and consultancy team for advice.