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‘Sales Surge’ forecast for Off-Plan property transactions in 2022

According to The National Association Of Property Buyers (NAPB), many homes will be sold “off-plan” by the end of the year. The association predicts that the number of properties available for purchase before they have been constructed will soar to historically high levels.

Data collected by the NAPB revealed that 37% of new homes sold in England and Wales were sold off-plan, up from 35% in 2020. The UK is not alone in experiencing this ‘sales surge’ as North Turkey real estate agents are reporting a rise in overseas buyers.

Statistics show a continuing trend in that during 2021 24% of detached homes were sold off-plan (up from 21% in 2020), 33% of semi-detached homes (up from 31%), and 45% of terraced homes (up from 41%).

Buyers of off-plan paid a record £1.1bn in deposits in 2021, almost four times more than the £348m deposited in 2007.

According to Jonathan Rolande, from the National Association of Property Buyers, there are a number of pros to buying off-plan, including:

– You can secure a property at today’s price. If property prices go up you gain. Eg. A property bought off-plan in Jan 2021 at £350,000 would after a 9.6% annual rise (per UK HPI) be worth around £383,600. (In theory.)

– Developers often sell the first off-plan properties on development at a keen price to get some money in.

– You may be able to take advantage of Government incentives, such as Help to Buy.

– You have a formal agreement to buy so the sale is very unlikely to fall through. You can start planning the move with confidence. Less likely to be affected by a broken chain.

– New homes are built to the latest designs and have the latest tech and are also much more energy efficient.

“The lockdown blip has seen the numbers sold off-plan reduce but we expect these to rise quickly to match and overtake the previous high of 47% in 2017. City center apartments will lead the increase with increasing numbers sold to owner-occupiers rather than investors.

“Buyers love the certainty of fixing a price on a home at today’s value, no matter what the market does in the future during construction,” said Jonathan, who is expecting the numbers to rise sharply in upcoming weeks.

He added: “Older buyers often take advantage of part exchanging the family home for a brand new apartment or smaller, more manageable house. The PX process gives guarantees unavailable in the ‘standard market’ eliminating viewings and fallthroughs. But buyers shouldn’t forget that new builds are premium products and are priced accordingly – there is often better value to be had in the second-hand market.

“Buying off-plan is a decision made out of a mix of personal preference and necessity, very often people commit early because they simply cannot find what they want elsewhere thanks to the incredible shortage of property coming to the market.”

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