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Well I think it's safe to say that I called the right time to jump back into off-plan property.
In addition to most professionals calling the bottom and the subsequent recovery, the last 3 months have seen various off plan developments releasing further phases at prices as much as 12.8% higher.
To put that in perspective, that's 12.8% in under 3 months.
Now we don't expect for a minute that it will continue to grow at the same rate, but those who bought ought to be over the moon, even after this short period.
To be able to own a property while it's being built without having to deal with any of the usual landlord issues is one of the best things in property investing and it's why I love off plan bought at the right time in the market.
We have now released two types of off plan. Well, more specifically, more two geographical types: London off-plan (which in most cases we are using exchange bonds) and, UK wide off-plan which is generally 5% cash input on exchange.
It's generally said that London leads the way out of any recession and I don't see why it will be different this time. London has the best fundamentals of any city, period. Even though your capital requirement will be double that of a non London property, the capital appreciation is likely to be worth it.
But don't discount the UK-wide off-plan. Developers' prices are much more reasonable in today's market and they've been told by the banks to accept offers. Good news for the investor.
As a guide, London discounts are around 5%-10% below developers' asking prices, and UK-wide is around 15%-20%.
Many are fooled into thinking that off plan is no good because “it's not 35% discount” like some stock was in late 2008. They need to wake up to the fact that the market has moved since then and the only 35% discounts you're likely to see are what I like to call the ‘arse end' stock. Ask yourself: if it wasn't good enough to sell then, what makes it a worthwhile investment now?
Off-plan property is definitely the way forward now. Naturally, stock is great if you can get it but good stuff is becoming almost impossible to find. Be realistic with your discounts expectations and you'll bag a bargain that will grow tremendously for you, even before it completes.
Remember whatever you buy now is coming from a low base. Even if prices drop away again over the winter, I am suggesting 5% maximum), it's still worth getting in now as long as you should be taking a long view.
Let's face it – with developers back on the building sites after their forced breaks due to the recession we'll be seeing a lot more phased price increases as the market does exactly what it does best – make cycles.
If you're ready to get educated and get off plan results, either call the team on +44 (0)207 923 6100.
Live with passion,
Brett Alegre-Wood
