Buying an off-plan house: a step-by-step guide

Buying off-plan means purchasing a property before it’s been built, or while it’s still under construction. You’re essentially buying based on architectural plans, computer generated images or models, and show homes, rather than being able to see the finished property.

Most commonly, you’ll find off-plan opportunities with new build developments where developers want to secure sales early to fund construction. This could be anything from single houses to entire apartment blocks or housing estates.

The key differences between buying a new build vs an older home include:

Timing: Instead of the typical 8 to 12 weeks to completion with existing homes, off-plan purchases can take months or even years to complete, depending on the construction timeline.

What you’re buying: You’re committing to purchase based on plans, specifications, and promises rather than a physical property you can inspect.

Contract terms: Off-plan contracts include specific clauses about construction delays, specification changes, and “completion on notice” rather than fixed completion dates. Make sure you understand all of these before committing.

Conveyancing: The conveyancing process and timeline for new builds work differently from existing properties as it is more complex. You’ll need a conveyancer with new builds experience.

Learn more: New build conveyancing explained

Mortgage considerations: Some lenders won’t offer mortgages for off-plan purchases, and those that do often have stricter lending criteria or shorter offer validity periods.

Deposit timing: While you'll pay a reservation fee upfront, your main house deposit is typically paid when you exchange contracts, which happens much earlier in the process than with existing properties.

Start by understanding your financial position and mortgage options, as off-plan purchases have different requirements from standard property purchases.

Check lending criteria: Not all lenders offer mortgages for off-plan purchases, and those that do often have stricter criteria. Some require larger deposits or impose strict restrictions on the construction timeline.

Understand deposit requirements: You'll typically need at least a 10% deposit, though some lenders may require 15-20% for off-plan purchases. Factor in the reservation fee (usually £500-£2,000) that you'll pay upfront.

Get early mortgage advice: Speak to a mortgage broker who specialises in new builds early in the process. They'll know which lenders work with off-plan purchases and can guide you through the timing requirements.

Since you’re buying based on plans or a partly finished property, thoroughly researching the developer is crucial.

Vet the developer: Check their track record by looking at previous developments, reading reviews from other buyers, and verifying they’re registered with the relevant industry bodies like the National House Building Council (NHBC). Check out other people’s experiences online by researching reviews and testimonials.

Review plans and specifications: Carefully examine architectural plans, material specifications, and finish details. Ask questions about anything that’s unclear or vague.

Visit existing developments: If possible, visit the developer’s completed projects to see the quality of their work. Speak to residents about their experience during the buying process and after moving in.

A mortgage in principle (MIP) is essential before developers will seriously consider your offer on an off-plan property (unless you’re a cash buyer).

Developers want proof you can secure financing before taking their property off the market, especially given the longer timescales involved.

Most developers want to see a MIP before accepting your offer to ensure that you’re a serious buyer with access to the necessary funds.

Off-plan purchases often provide more room for negotiation than buying existing properties.

Pricing considerations: Make sure you get the best price on your off-plan property. House building is a cash-intensive business, developers will want to sell as many properties as quickly as possible.

Available incentives: Developers might offer incentives like help with legal fees, furniture packages, or upgraded fixtures and fittings. Always negotiate these as part of your overall deal.

Choose a conveyancer with specific experience in off-plan and new build purchases, as the process is more complex than standard property transactions.

Why specialist experience matters: Off-plan conveyancing involves reviewing construction contracts, understanding building warranties, and navigating completion on notice clauses.

Key questions your conveyancer should ask: They should clarify construction timelines, specification change procedures, what happens if completion is delayed, and your rights if the developer fails to meet their obligations.

Once your offer is accepted, you'll need to pay a reservation fee to secure the property.

Reservation agreements: This legal document outlines the terms of your reservation, including the fee amount, reservation period, and conditions for refunds.

Key terms to understand: Pay attention to the reservation period length, circumstances where your fee is refundable, and what happens if construction is delayed beyond agreed timescales.

With your property reserved, it’s time to submit your full mortgage application.

Timing considerations: You'll typically have 28 days to exchange contracts, so apply for your mortgage immediately after reserving. Off-plan purchases can't afford delays in the mortgage process.

Special requirements: Your lender will need to see the reservation agreement, property plans, and construction timeline. Some lenders may require regular construction progress updates.

Exchanging contracts on an off-plan purchase involves additional considerations compared to existing properties.

Your contract will include clauses about construction delays, specification changes, and completion on notice rather than a fixed completion date.

Ensure your contract includes a long-stop completion date. If the property isn't finished by this date, you can withdraw from the purchase and get your deposit refunded.

You'll typically pay a 10% deposit when exchanging contracts. At this point, you're legally committed to the purchase.

After exchange, you'll wait for construction to complete, which could be several months or even longer.

Stay in regular contact with the developer for updates on construction progress. They should provide regular updates on timelines and any potential delays.

Use this time to plan your move and ensure your mortgage offer remains valid. Some lenders offer extended mortgage offers for off-plan purchases.

Before completion, arrange for a professional snagging survey to identify any defects in your new home.

Professional inspection: Hire a qualified snagging surveyor rather than inspecting the property yourself. They're trained to spot issues that untrained buyers often miss.

Comprehensive reporting: You'll receive a detailed report of any defects, which you can present to the developer for fixing before completion. Professional reports carry more weight with developers than informal complaints.

Timing: Book your inspection as soon as the developer says the property is nearly ready, allowing time to address issues before completion.

The final step is completing your purchase and getting the keys to your new home.

Completion on notice: Unlike standard purchases, you can't set a fixed completion date. The developer will give you notice (usually 10 working days) when the property is ready for completion.

Final checks: Do a final walk-through to ensure any snagging issues have been resolved and the property is ready for occupation.

Moving in: Once completion occurs, you'll receive the keys and can move into your new property.