* Today in London it is possible to buy a home that will be ready to move into in four months’ time - but it could also be a four-year wait and mortgage offers are only valid for six months.
* Off-plan sales currently available in London include Argyll Place in North Kensington; Bloomsbury Gardens, WC1; Kingston Riverside; The Mission in Hackney Wick; One Tower Bridge, SE1; Signal Building at Newington Causeway; Amberley Waterfront, Little Venice; The Old Vinyl Factory in Hayes; Merano Residences on Albert Embankment; and The Tower at Saffron Square
The economy is picking up and buyers are out looking for new homes, but when there are not enough properties being built, developers have the whip hand. Offering new homes off-plan is the way the builder guarantees a sale — and the buyer guarantees a home.
Purchasing a home before it is built may seem a risky strategy but two in five of the capital’s new-build homes are now bought off-plan, because it is the only way to get the property you want, in the location you want.
On the positive side, early buyers to a new development can cherry-pick the home with the best view, size, layout, garden or terrace, and they may be offered “bespoke options”, ranging from paint colours and flooring choices to structural alterations.
You do not get a discount for buying off-plan, but by the moving-in date the property may be worth more than you are paying. In the Eighties, rising-market investors piled in to buy property and sell it on before development was completed, hoping to make a quick profit. When the crash came, many got their fingers burnt. They could not sell, they could not afford to complete and they lost their money.
WHAT YOU NEED TO KNOW
The pitfalls to buying off-plan
For a start, you pay a high premium for a new home — typically 30 per cent. Often the deal is done in glamorous, head-turning marketing suites with mocked-up interiors, where developers produce seductive computer images and fly-throughs of the finished scheme that do not tell the whole story. It is impossible to grasp the true picture of the finished home in a marketing suite which can give no idea of natural light, views, noise or the aspect of the property.
There is nothing to beat viewing a finished home
New-build homes have become more fashionable than resale homes. They are better insulated, energy-efficient and therefore cheaper to run. Many buyers believe they are better quality, with the latest mod cons and stylish interiors.
However, John East, director of new homes at Kinleigh Folkard & Hayward, said: “Some buyers shy away from off-plan properties, fearing the home they are sold might not be the home they get. By law, developers must provide buyers with a property as represented in the brochure and plans.”
It is up to the buyer to scrutinise the brochure and contract to look for small-print loopholes. This is where a good solicitor comes in.
For example, there might be references to a gym but no firm pledge to provide one. This “extra” could have been abandoned by the end of the build.
Virtually all new developments are covered by an NHBC insurance warranty, or equivalent, giving buyers protection against shoddy workmanship or a builder going bankrupt, while an industry code covers pre- and post-contract matters, from reservation to occupation. Visit consumercodeforhomebuilders.com,
The waiting period: from four months to four years
Today in London it is possible to buy a home that will be ready to move into in four months’ time, or up to four years’ time. Most buyers want to synchronise selling their existing home with moving into a new one, if only to release equity to help pay for the new property.
Mortgage offers are valid for up to six months so if completion will take longer, there is no point in applying for a loan. The longer you have to wait before the home is ready, the more chance that market conditions will be different. The price you pay is fixed but mortgage rates may be higher or the property’s value may have dipped as completion draws near.
Buying at an early phase of a big development can be a double-edged sword. Normally developers push up prices as the scheme gets built. But the first residents have to live on a construction site for a longer period. This is why some buyers prefer smaller developments where all the homes are handed over at the same time.
BUYING IN LONDON OFF PLAN: CURRENT OPTIONS
NEW HOMES READY BY 2014
Argyll Place is a rare new-build scheme of 20 houses in a tree-lined Edwardian conservation area, the St Quintin Estate in North Kensington. Prices from £1.33 million. Call Strutt & Parker on 020 3667 5566.
Bloomsbury Gardens, WC1, has 44 apartments backing on to historic St George’s Gardens. Ground-floor duplexes have terraces with stairs up to the scheme’s private gardens. Prices from £699,999. Call 020 7299 3322.
Regent Canalside apartments are in the heart of buzzing Camden Town. Prices from £799,999. Call Faron Sutaria on 020 3675 8473.
Kingston Riverside looms over the Thames and has apartments with floor- to-ceiling glass and big terraces jutting out like the prow of a ship. Prices from £285,000. Call Redrow on 020 3581 2003.
NEW HOMES READY BY 2015
The Mission is an imaginative redevelopment of a cathedral-size church in Hackney Wick, bringing 25 new loft-style homes, including a fabulous triplex apartment in the listed tower. Prices range from £235,000 to £500,000. Call estate agent Fyfe McDade on 020 7613 4044 for more information.
One Tower Bridge is being built, as the name suggests, alongside one of the capital’s most famous landmarks. Nine buildings offer 356 private flats, with a Victorian school converted into a five-star hotel. Prices from £850,000. Call 020 7871 0011.
Signal Building is rising at Newington Causeway, which runs between Elephant & Castle and London Bridge. Duplex penthouses are priced from £395,000 to £1,425,000. Call Daniel Cobb on 020 7357 0026.
Amberley Waterfront, close to the houseboat enclave of Little Venice, has 47 apartments, including glass-walled penthouses with rooftop gardens. Prices from £895,000. Call Redrow on 020 3538 1512.
Oval Quarter is a phoenix-like scheme rising on the site of a Seventies council estate — 30-acre Myatt’s Field North. A total of 808 new homes are in the pipeline, along with one of the largest new parks in London plus allotments and a showpiece community centre. Prices from £272,500. Call 020 8498 6001.
NEW HOMES READY BY 2016
The Old Vinyl Factory in Hayes, formerly the headquarters of record label EMI, is set to become a new “quarter” with 630 homes, boutique shops, work studios, bars and cafés, a cinema and museum. Call Cathedral Group on 020 7939 0812.
Merano Residences on Albert Embankment will bring 48 apartments, some with views of the Palace of Westminster, in a 28-storey tower. Call developer St James on 020 7870 9620.
The Tower at Saffron Square, Croydon, has 414 apartments plus restaurants, galleries and shops facing a new one-acre public square. Prices from £160,000. Call Berkeley Homes on 020 8774 9888.