Q. Why are off plan opportunities so much more expensive then the second hand re-sale market? I have a one bedroom that’s 5 years old but the same size unit on a similar new build development is on the market for £100,000 more than my apartment, surely that can’t be right?
A. Off plan units tend to be more expensive than the re-sale market mainly because they are reserved years before completion. The mark up takes into consideration the projected figure at the time of completion, and of course the fact that the property is brand new and of high specification and is likely to surpass any other building built previously. Off plan opportunities depending on the market conditions can often command an attractive return even prior to completion, hence the demand for the re-selling of off plan units prior to the original purchaser completing on them. From the developers point of view when they are building over a long period of time they have to take into consideration the weather (which can often hold up the build) and cost of materials which again can go up over a period of time. Buying a new build obviously has the advantage of being maintaince free, unlike a resale that could attract replacements of costly items such as central heating and boilers.