If you have been considering investing in a property, now is a great time to begin investigating developments and developers that have caught your interest. There are several reasons why people are entering the property market anew or expanding their portfolio in these times, but what can you expect of the purchase process to be once you have taken the plunge?
Understanding buying off-plan
Investing “off-plan” is usually buying a property before building works have completed, and it allows buyers to take advantage of the best market rates as values can increase significantly once a development is completed. When buying off-plan, buyers usually secure the property for a reservation fee (typical reservation fees can vary, but they will usually be anything between £5k to £20k) which completely removes the property from the open market.
Once the reservation fee is received, the developer will then set out a payment schedule in the memorandum of sale which is then issued to both the buyers and sellers' solicitors. Payment processes vary greatly, often depending on the development timeline, method of purchase and the buyer's individual circumstances. At The Heaton Group, we tie our payment processes to build stages that are signed off by third parties and then issued to the buyers solicitors, thus giving our buyers maximum confidence in proceeding. A typical payment process might look like:
- Reservation fee paid and property removed from market
- Exchange with % of properties purchase price within 28 days
- % of properties purchase paid at agreed build milestones – e.g. first fix (monies not requested until build stage is signed off by third party).
- Balance upon completion of the development minus reservation fee
- Monthly updates given to buyer throughout purchase process
We will also prompt mortgage buyers at the optimum times to engage with brokers and book in valuations. Buy to Let mortgages and commercial mortgages have different lending criteria to residential, placing more importance on income being able to cover the mortgage outside of the expected renting of the property, and they’ll analyze demand or popularity of the local area. The Heaton Group only pick popular or in-demand locations for properties to ensure mortgage applications run smoothly.
We can’t stress this enough – being connected to your investment should always be a big part of the purchase process. We believe communication builds trust in your property investment which is paramount for a good investment experience and future working together. At The Heaton Group, we guarantee monthly updates to our investor database by email, including pictures so you can see how works are progressing .This means that even in these current times, we can keep investors informed and have provided confidence that our developments will be completed on-time and to specification.
If you’ve been delaying your property investment decision, don’t! There is a prediction that once the pandemic is over, there will be a massive demand for property as it is a highly resilient market. To speak to us about your next property investment email us on email@example.com or call us on 01942 251945