Off-Plan Property – The best strategy
New build off-plan property is now a strategy whose time has come. For the past three years, it has carried too much risk in most circumstances and therefore it was to be avoided. The main reason that this off plan property strategy was to be avoided was that since 2006 through the middle of 2009 it was to be avoided due to overpricing and the risk of a downturn.
Gladfish pulled out of selling new build off-plan property in 2006 for this very reason, even though many companies continued to sell off-plan property which simply meant that many clients were at risk if the market dropped. Which it did throughout 2008, and early 2009 leaving many clients with properties significantly below the value they had exchanged on. This obviously placed many clients at risk of being sued and as a result of this (and many other questionable practices) meant that many of these businesses failed.
Gladfish prospered because of its understanding of the property cycle and through knowing that type of properties to buy in each part of the cycle. This understanding is why we are also saying that now is the time to jump back into new build off plan property.
Why now is the time to take advantage of off-plan property?
Builders who have stopped building have seen the recovery begin in late 2009 and therefore they have started, albeit slowly, to build again. We are all aware how hard it is to find finance and, therefore, these builders are looking to resell some of the new build property as off plan sales. This has created the supply of off-plan property.
The property cycle will begin recovery in earnest in 2010 and this will bring back the demand side and slowly raise prices. Initially these off plan property prices will rise for new build off plan property in London. From there it will ripple out along those places with the greatest fundamentals until the entire market is back on fire.
The greatest opportunity for you is to secure a property at today's prices, it a limited exchanged deposit of between £1000 up to around 10% and then waiting as your new build off-plan property grows in value before completion.
It may be too early even now.
I am not saying that you should buy every off-plan property right now, in fact far from that. I am however saying that at the least you should get educated about the process, the strategy and the risks associated.
New build off-plan property is perfect right now under the following conditions: (I write this as at January 2010, which means that the time-lines and strategy may change as time goes on and the recovery takes hold, so if you are reading this and aren't sure what you should be doing just give the team a call on +44 (0)207 923 6100.)
1) You have the money to complete assuming a 65% mortgage, that's not to say you won't get up to an 80% mortgage and that's not to say that this won't change.
2) If you are buying in London that completion takes place no sooner than September 2010. There is no long stop date except that if you place the completion out too far you may miss opportunities while your money is tied up.
3) If you are buying outside of London and in a major city then you can consider it no earlier than March 2011.
4) if you are anywhere else then leave it until at least June 2011 or after.
All of the above can be negated if you have solid fundamentals in the area. Also, if you are getting a large discount 25%-30% off the current market value. So whilst it might seem like I am saying don't do these things, if you find the right property for the right price in the right area and you have the money required to complete (as in not relying on the market to grow in order to complete) then we will be fine.
Give the team a call on +44 (0)207 923 6100 if you want to discuss or more importantly, take advantage of the market right now.
Live with Passion,