Reader needs help with buying off plan advice please

by Readers Question

9:56 AM, 11th November 2016
About 2 years ago

Reader needs help with buying off plan advice please

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Reader needs help with buying off plan advice please

Long time reader of this great forum but unfortunately not having the time to contribute much, but hope that to change going forward.off plan

A two part question really for myself who has been a landlord for 6-7 years, but never considered new builds/off plan properties.

A) Do people have any tips in regards to due diligence and specific questions to ask when looking at these sorts of properties outside of the obvious?
I have heard of horror stories where people have brought off plan with ridiculous increases in ground rent for example rendering the property worthless. But I’m sure there are a raft of due diligence I should perform in regards to the property and agent.

B) The Agents. A couple of properties I’m looking into are being marketed by Aspen Wolf and Parker Buchanan in Leeds. A simple google search on Aspen Wolf fills me with no confidence, talk about their developments not being on time, shoddy build and not following up on rental guarantees. What are peoples thoughts on going through these agents, any specific diligence, questions again?

Its quite annoying regarding B as the properties if build to spec and promises followed upon look really promising/attractive.

Look forward to an engaging discussion.

Thanks All
Damian



Comments

Neil Patterson

10:01 AM, 11th November 2016
About 2 years ago

Hi Damien,

One of the most common issues I have run across purchasing off plan is if you need a mortgage and the length of time before completion.

You can end up exchanging on a long completion, but a mortgage offer is only normally valid for a maximum of 6 months. If anything changes, and you can't get a new application agreed, you are stuck with the completion and no loan, potentially losing 10% deposit.

I have seen this happen many times!

Paul Green

21:07 PM, 11th November 2016
About 2 years ago

I bought of plan once i sent the deposit 75K (bankers draft) this was in 2003 through the post & the post office went on strike, so I missed there deadline (completion date) and crest Nicholson, were threatening me with default charges, interest on every day on the full purchase price £256k. Anyhow the draft turned up the following week and we completed, they dropped all fees as they got there money & because I explained it was out of my hands, I did not call the Royal Mail strike. Also you can't cancel a bankers draft as it's seen as cash, you have to wait 6 months and then fill out an indemnity form, saying you will pay them back if it's cashed later on in life. I was stuck between a rock and a hard place. buying off plan is Not with out risks anything can happen, it's usally the property does not get built and the developer runs of with the money, of files for bankruptcy...

Michael Bond

18:15 PM, 12th November 2016
About 2 years ago

Buying an investment property or buy-to-let off plan? DON'T!

Paul Green

21:32 PM, 12th November 2016
About 2 years ago

Your pay to much for a new build, their over priced and you won't make as much capital gain and your yield will be lower, also be careful, developers are now selling houses as leasehold and doubling the ground rent every 10 years, for the next 50 making them impossible to sell on. I've read stories we're the ground rent will reach £14 to £18000 pounds per year.,,buyer be ware...


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