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Is Buying New Build Properties Still Fashionable?

New build - Newly built housing unit
Off plan -
Before building is complete, based only on the plans of a building that has not yet been constructed

Buying new build or off plan properties as an investment has had its ups and downs. Early in the decade, it became all the rage and many investment companies sprang up to cope with the demand from new and would be investors for developments both in the UK and OVERSEAS.


Some were simply sourcing companies acting as Agents on behalf of the building company or developer to secure sales. Others actually used bulk buying power to purchase a large chunk of a development themselves, in order to sell individual units at a profit to Investors. Many even ran courses and charged membership fees for the privilege of buying properties off them.

 

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There has been some bad press with criticism from some that these schemes and companies have actually been responsible for over pricing and artificially inflating values.

 

It is unfortunate that some Investors have perhaps made wrong choices when investing in new build properties and are now in a position of negative equity and rental values not coving the mortgage payments. Perhaps it is the sourcing companies fault, or perhaps the Investor themselves should have been more thorough in their due diligence.

 

There are some very ethical companies who still specialise in new build and off plan properties and offer some extremely good opportunities.

 

Developers will always try to secure some level of investment whilst new build properties are still at the planning stage. This shows lenders that the scheme is worthwhile and indicates to other investors that the development is a viable option. It is usual for the developer to offer incentives in the way form of discounts offered on the perceived RICS valuation of the finished development, free furniture packages, free legal costs etc. The discounts offered at the planning stage are often greater than any other discount that may be offered by the developer at later stages.

 

 

 

 

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