MH Real Estate

Friday 20 November 2015

Place Your Bets – Buying A Flat Off Plan

It is extraordinary that the practice of viewing a muddy hole in the ground (or just viewing computer generated schematics), entering into a binding contract with payment of a 10% deposit to purchase a flat which may, or may not, be built upon it at some point in the future, has grown to epidemic proportions in recent years. This is buying “off plan”. The reasons for this epidemic are obvious but, in particular, the availability of new properties is not keeping up with the apparent demand. There were many burnt fingers during the recent recession when purchasers who had, prior to the recession, exchanged contracts to buy off plan found that the value of their prospective flat fell dramatically during the recession and often with the subsequent inability to obtain the necessary mortgage finance to complete. Despite that, buying off plan, whether a flat or house, is now being pursued by UK and overseas buyers with great abandon. Therefore, some downsides and upsides to note below: