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26 Mar 2021

Key Factors to Consider when Buying Off-plan 

Key Factors to Consider when Buying Off-plan

The off-plan development market is growing with speed. To secure the best off-plan investment, investors purchase in areas with exciting growth potential. Regeneration schemes future proof towns and cities, attracting numerous business opportunities. Additionally, cities delivering successful regeneration projects witness a boost in the local and regional economy. Therefore, increasing the rental demand and pool of potential tenants. 

So, what are the key points to consider when investing in an off-plan property? 

A Desirable Location

The right property investment will help you achieve your property goals, whether they are short-term or long-term. Therefore, selecting the best investment location is crucial. The pandemic and lockdown restrictions have realigned priorities for many. Research has shown a surge in buyers looking for places with easy access to parks and open spaces. It is important to consider any amenities in the area. From outdoor gardens and parks to local supermarkets, banks, and restaurants. The surrounding area is just as important as the development itself.

Many investors choose to buy in city centres such as Manchester and Sheffield, where demand is high and rental yields are on the rise. For instance, in Sheffield, the average property price sits at £214,445. This is below the UK average house price of £249,309. Therefore, buyers can secure purchases with a much smaller budget in comparison to other cities such as London. Outside the capital, it is evident prices are cheaper, so investing in smaller cities is also profitable. There are great off-plan developments located in commuter belts and towns with growth potential.

Connectivity Attracts Commuters

A profitable investment stems from a development positioned in a well-connected area. Strong transport links attract a higher number of commuting working professionals. Enhanced air, rail and road accessibility are the key drivers attracting tenants.

Key factors to consider buying off-plan: connectivityDevelopments positioned in close proximity to train stations and airports are much more desirable to tenants. The HS2 is currently the largest transport development across the UK., aiming to provide efficient services and reducing travel times between cities. Therefore, people working in the capital can rent homes out of the centre at a cheaper price and still commute to work. 

Are Rental Properties in Demand?

A short-term investment focuses on the rental perspective of a property. Rental yields are determined by location, property price and demand in the area. Rental demand is normally higher in cities with a large university scene and a growing working population. Thus, boosting rental prices, mitigating the risk of vacant properties, and ensuring a continuous cash flow. However, it is important to note demand is also increasing in neighbouring towns.

Data released by the Aldermore Tracker reveals Hull achieves the highest short-term rental yields of 9.2% across the 50 cities in the UK. Cities of Yorkshire & the Humber perform the strongest in terms of overall rental yields, this is primarily due cheaper house prices and rising demands.

 

City Regeneration Plans are Key

Investors with a long-term goal will generally analyse the surrounding landscape. Considering any regeneration schemes underway or in the pipeline. For example, Sheffield is currently enhancing the food and leisure scene and revitalising the business area. The Heart of the City II development is set to grow the area, attracting businesses, and increasing employment. The city of Hull is also revamping the area with new business hubs and opportunities for skilled professionals. Moreover, these factors will contribute to a booming economy and strong capital growth. Over time, the development purchase will increase in value, making it a profitable investment opportunity. If you purchase the development off-plan, by the time of completion, the property will increase in value.

Proposals Tailored to Suit You

Whatever your reason is for investing in property, a CityRise consultant will always take the time to get to know you before choosing the appropriate investment. Our property proposals are always tailored to suit your situation and preference.

All our developments, including those off-plan, have been carefully selected based on their overall reputability, security, location, price and potential returns. Each investment undergoes a complete vetting process and is checked using a thorough due diligence report. We work with reputable developers delivering high-quality and energy efficient properties in prime investment locations. Why not speak to one of our consultants today to secure your off-plan investment?

 

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