Off Plan new build concerns?
I am considering buying an off plan first floor 2 bed apartment in Biggleswade. These are going to be part of a huge envelopment that has been going on over many years. The developer is asking for 10% deposit of the asking price after the exchange of contract (28 days) and pay the balance on completion. Completion should be May/June 2016 although they wont give a fixed date.
Their are couple of things concerning me. Although the complex looks very presentable in glossy print the apartments are to be constructed above a row of four shops. I believe there will be small supermarket, chemist and a couple of others. I don’t think takeaways will be allowed. Secondly half the block ( 8 apartments) has to be allocated to Housing Association. Not that this should necessarily be a problem.
I was hoping that some body who may have purchased under similar circumstances may be able to shed some light on any potential pit falls with these new builds?
Many thanks,
Giles
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Lawns ruined and tenant is refusing to pay?
Member Since June 2014 - Comments: 5
2:01 PM, 21st August 2015, About 11 years ago
Reply to the comment left by “Konstantin Matveev” at “21/08/2015 – 13:08“:
Hi Konstantin,
I didn’t buy from a small local developer but big company that builds in prime London locations. I am sure their intention was to meet the deadline but there were some unforeseen problems with the build. My point was that buying off plan you have no control over time frame of your investment. For me this was a problem, if the completion wasn’t delayed I would buy at least two more properties by now, and instead I am still waiting!
I considered renting it out, but many of these flats were bought by investors so once they are completed there will be too many of them available for rent. Landlords will reduce their rents just to secure the tenants and monthly profit will be rather low.
Joanna
Member Since February 2015 - Comments: 5
2:13 PM, 21st August 2015, About 11 years ago
Reply to the comment left by “Tony Atkins” at “21/08/2015 – 12:53“:
Hi Tony,
Many thanks for your comments.
Please could you elaborate on paragraph 1.
“Off Plan: your off-plan contract cannot oblige you to complete, so you always have a get-out option”
If I proceed with this purchase the builder will require
1. Reservation fee (minimal) to hold the property
2. After 28 days a 10% deposit is required (exchange of contracts)
3. Balance required after completion
I was also told that If I decided to with draw after 28 days then I would forfeit that deposit.
Is insurance likely to be more expensive being over commercial outlets. As I understand it A1,A2 and A3 will allowed there.
Many thanks
Member Since July 2013 - Comments: 463
2:30 PM, 21st August 2015, About 11 years ago
Reply to the comment left by “Giles Peacock” at “21/08/2015 – 14:13“:
Giles: I merely meant that no-one can force you to buy the property once you’ve signed the contract: you can still pull out, if you decide the property is really such a bad deal, but as with exchanging contracts in a normal purchase, you will of course lose your deposit after 28 days.
I’ve no idea whether insurance will be more expensive: you need to ask an insurance broker or a specialist provider of BTL insurance.
Member Since March 2015 - Comments: 5
2:56 PM, 21st August 2015, About 11 years ago
Reply to the comment left by “Giles Peacock” at “21/08/2015 – 14:13“:
Giles,
Building will be usually insured by your freeholder (or management company), this is usually part of your management costs. And I don’t think it will be a big difference for the contents insurance..
Member Since February 2015 - Comments: 5
4:28 PM, 21st August 2015, About 11 years ago
Reply to the comment left by “Konstantin Matveev” at “21/08/2015 – 14:56“:
Many thanks all for your help and advise.
Kind regards,
Giles
Member Since April 2014 - Comments: 136
10:36 AM, 22nd August 2015, About 11 years ago
Reply to the comment left by “Tony Atkins” at “21/08/2015 – 14:30“:
If you pull out you will be liable for the developers consequential losses.