Off-Plan Investing | As you may be aware, the Bank of England has held the base rate at 5.25% for the fifth time in a row on 21 March 2024. The market is expecting the first cut in interest rates will be in June 2024, and by the end of 2025 falling to around 3%. With this trend, savings account interest rates are expected to fall. In contrast, the property market is expected to thrive. Investing in off-plan properties could be a smart choice under the current economic circumstances. This article will discuss the 5 most important benefits of off-plan property investment.
Off-Plan Properties Cost Below-Market Rates
Investing in off-plan properties offers a unique opportunity to leverage your capital, potentially yielding equity growth during the construction phase alone.
Investors can reap significant benefits by considering off-plan properties, especially in these uncertain times. One notable advantage is that off-plan properties usually cost 10-15% below their market value. This discount translates to immediate strong capital growth even before the completion of the project, thereby maximising profitability.
Flexible Payment Plans
During the build stage, off-plan investments often offer flexible payment plans. This means that investors can make scheduled payments throughout the construction process without the immediate need for a mortgage. This flexibility allows investors to effectively manage their finances during the build stage.
Furthermore, it’s worth considering that upon completion, investors can explore mortgage options. This timing could be advantageous as interest rates are expected to drop this year. By waiting until completion to secure a mortgage, investors can potentially benefit from more favourable borrowing conditions.
Flexibility in Customisation
Off-plan properties provide investors the chance to acquire brand-new units in a development. This means investors can cherry-pick the apartments that best suit their preferences and investment goals. Selecting desirable units can attract high-quality tenants, leading to long-term rental demand and premium rates.
10-Year Structural Warranty
Off-plan properties often come with a structural warranty that typically lasts for ten years. This warranty provides peace of mind to investors by safeguarding them against unforeseen structural issues or defects. With this protection in place, investors can avoid the financial burden of costly repairs, ensuring a hassle-free ownership experience.
Investing Off-Plan: Popular With Tenants
Off-plan properties, particularly apartments, often hold greater appeal to prospective tenants compared to older counterparts due to their typically advantageous features, such as prime locations and contemporary amenities.
Tenants are generally willing to pay a premium for these sought-after attributes. For investors, this translates into the potential for immediate returns upon completion, bypassing the need for extensive refurbishment periods.
Consequently, off-plan investments present a strategic opportunity for investors to capitalise on current market demand and secure favourable returns in a timely manner.
For personalised portfolio advice, contact one of our investment experts at +44 (0)151 433 9300 or via email at contact@advantageinvestment.co.uk.
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