Should you buy property off-plan?

The Robs discuss how you can avoid disaster and potentially win big with off-plan property.

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[sarahwennostephensonofficial]

Hi Rob and Rob, Great and valuable content. I wish I had seen this video before losing a big chunk of money, £138K. I bought an off-plan property in Liverpool in 2015 with a phased payment plan. The completion year 2019 total £109950 now rented. In 2016, I purchased another off-plan in Manchester from the same developer, but this time, it was the biggest regret and mistake I have ever experienced; as you mentioned in this video, "only put down a 10% deposit". On the payment on this Manchester project, again, the cost with a phased payment plan: 1st payment was £60K 2nd, £60K, and the rest on the completion. Towards the end, the developer gave us the most horrible news that the projects had gone to administration. 271 investors lost money. Our deposit payment was supposed to be locked in Escrow, but they released the funds to Elliot Lawless Group. For some reason, He was arrested along with the Mayor of Liverpool but released. Sorry to rambling on about this. I thought people should know there are a few crook con developers. Just have to be careful. Thank you again for all the knowledge you both gave us.

[ChannetteCarleoTV]

when were talking about the deposit are we talking about the mortgage deposit or deposit to buy the porperty ie reservation fee. Im confused at who hold the deposit? The bank or the developer?

[pt]

In my experience, and I can't speak to other areas than my own, new-build properties are often sold at a premium to market value. So even with a discount, be wary of a "first-owner tax". A friend of mine dipped in to negative equity in the first year or so post-purchase.

[Mrlistenandlearn]

4:33 Deposit is held in a what cant hear?

[FHIPrincePeter]

I need some perspective here. What are the absolute costs?.
1. The Legal Fees?
2. The Interest Rate ( if deposit opportunity cost)?
3. Surveying Fees ?
4. Capital Gains Tax ?
5.Any Stamp Duty?

The liquidity of selling once the development is ready? Otherwise you would need to pay the full mortgage I presume which would increase the rate of interest paid?

[walkjivefly]

A few words of advice: absolutely never buy anything off-plan from Fortis Developments.

[crooksy]

Very useful information. But that flicking background is sending me bonkers!

[odysseasv]

You should have talked about the cons, like negative equity, value going down after built etc

[TheMkireev]

Hi, Rob and Rob! Great advices, but it can be difficult to follow them in reality. I have a real life example. We would like to buy an apartment in Manchester Waters phase 3. I think this development has huge potential for future price growth. But! They demand 35% deposit and they will not hold deposit in escrow account. It is quite risky, but, taking into account reputation and size of developer, I hope it will not go bust and there will be a substantial price growth when it’s completed. What would you do?

[flowlikeafordbuick]

Good stuff! Though i slightly object to the view of leverage working only upwards! Leverage is sweet on the way up but pretty painful on the way down. There are plenty of examples in London of people who have experienced this recently. I'm not saying its certain but i think both sides of the leverage argument should be shown.