Off-plan property: how it works and what to check

Buying off-plan means agreeing to buy a home before it is built or finished. You fix the price and the property early, pay a deposit, and complete when the developer is ready. The appeal for investors is time: capital is committed in stages and the property arrives new. The risks sit in the same gap: the developer has to finish, your finance has to be ready when it does, and the property has to be worth what you agreed to pay. This guide walks through each stage and the protections that exist in England, as of 22 October 2026.

The stages of an off-plan purchase

Reservation: what the New Homes Quality Code requires

Developers registered with the New Homes Quality Board must follow the New Homes Quality Code. Version 2 applies to homes reserved from 2 March 2026. The Code protects a customer who reserves on or after the date their developer was activated under it, and it does not cover a home bought by a commercial entity such as a company. Under the Code, a reservation agreement must set out, among other things:

• the reservation fee and the terms on which it can be refunded;
• a cooling-off period of at least 14 days, during which you can cancel for any reason and receive the full reservation fee back;
• the price and how long it, and the agreement, remain valid;
• contact details for the new home warranty provider and a summary of the cover;
• the date by which contracts must be exchanged, which must be reasonable and not less than six weeks after the reservation date unless you ask for an earlier date; and
• the estimated yearly cost of management services and the tenure of the home, with an Affordability Schedule of likely tenure and management costs for the five years after the sale.

While the reservation agreement is valid, the developer cannot cancel it or sell the home to someone else. For investors, the Affordability Schedule is particularly useful: service charges and ground rent come straight off the net yield.

Exchange, deposits and staged payments

At exchange the contract becomes binding and the contract deposit is paid. On selected developments, the deposit can be built up in stages during construction rather than paid in full at exchange, under the developer's contract and payment schedule. The balance is funded at completion, so the plan for that money needs to exist from the start.

The Code requires the contract of sale to define the completion notice period, set out when you can cancel, for example after an excessive or unreasonable delay or an unagreed change that affects the size, value or appearance of the home, explain what happens if the home is not ready by the date given, and explain how deposits will be protected. If the developer makes a major change, you can cancel within 14 days of receiving written details and receive a full refund of the contract deposit, the reservation fee and any other payments.

Developer insolvency and deposit protection

A key risk in off-plan buying is the developer failing before completion. Two layers of protection may apply.

The developer's deposit arrangements

The Code requires developers to have adequate arrangements to protect deposits, reservation fees and other payments. That may mean insuring the full contract deposit through the new home warranty, holding the money in a separate client account that the developer cannot draw on until completion, or another legal arrangement covering the whole deposit or any uninsured part. If a contract is cancelled, the developer must refund the deposit and other amounts due within 28 days.

The new home warranty

NHBC's Buildmark policy, as one example of a new home warranty, includes cover if the builder becomes insolvent before the completion date. NHBC will either repay a lost deposit, up to the financial limit in the policy, or meet the reasonable extra cost of having the home finished. To claim, you must show you had good reason to believe the builder could meet its obligations when you signed, and that you always intended to complete and either live in the home or let it. Money intended to fund construction as a short-term investment is not covered. Read the policy booklet and schedule for the limit that applies to your purchase.

Warranty checks before you commit

New home warranties differ between providers, so read the one that applies. Buildmark, for example, is split into a builder warranty, usually for the first two years, and NHBC insurance for the following eight. During the builder warranty the builder must put right defects that breach NHBC's requirements, with NHBC guaranteeing those obligations and offering a resolution service if the builder does not. From year three, the insurance covers damage caused by defects in specified parts of the home, including the cost of alternative accommodation or lost rental income while covered repairs are made.

• Confirm which warranty provider covers the development, and that the plot is registered.
• Read the policy summary the reservation agreement must include, especially the deposit protection limit.
• Check what is excluded, and the minimum claim value.
• Ask your solicitor how the deposit is held between exchange and completion.

Mortgage timing versus completion dates

An off-plan purchase can run for months or years between exchange and completion, and mortgage offers are valid only for a period set by each lender. If completion moves beyond the life of an offer, a new application and a new valuation may be needed, on the rates and criteria available at that time. Completion dates are estimates until the developer serves notice to complete, and under the Code the notice period is usually expected to be at least 14 calendar days, which is short for arranging finance from scratch.

In practice this means agreeing the funding route early, keeping your mortgage broker informed of build progress, and holding a contingency in case the cost of borrowing changes. The buy-to-let mortgage calculator lets you test the purchase at a higher rate than today's, and our buy-to-let mortgages guide explains how lenders stress-test rent.

Valuation risk at completion

The lender's valuation reflects the market when you apply for the mortgage, which on an off-plan purchase may be close to completion rather than at reservation. If the valuation comes in below the contract price, the mortgage available may be smaller than planned and the gap has to come from your own funds, because the price in the contract does not change. The same applies to rent: the lender assesses rental income at the time of the application, so a rent assumption made at reservation needs fresh evidence.

Stamp duty adds a second timing risk. The effective date for SDLT is normally completion, so the rates in force at completion apply, and the return and payment are due within 14 days. Our stamp duty guide sets out the current higher rates.

Snagging and the pre-completion inspection

Under the Code, legal completion can only take place on a complete new home that meets the building regulations and building safety requirements and has evidence of warranty insurance. The developer must not offer an incentive to complete on a home that is not complete.

You must be given the chance to inspect the home before completion, after notice to complete has been served, either yourself or through a suitably qualified inspector who belongs to a recognised professional body and holds professional indemnity insurance. The inspection uses the New Homes Quality Board's standard checklist. Where it finds issues that breach the warranty's technical standards, the developer must deal with them, ideally before completion or within 30 days if that is not possible.

After completion, the developer must provide an after-sales service for at least two years. You can complain under the developer's procedure and refer the complaint to the New Homes Ombudsman Service within two years of reservation or completion, whichever is later.

Off-plan as an investment

The disciplines that matter most are the ones that cover the gap between signing and completion:

• model the purchase on rent evidence you expect at completion, not today's marketing figure;
• include service charges and ground rent from the Affordability Schedule in the net yield;
• check the lease for letting restrictions, especially if short-term letting is part of the plan (see our short-term lets guide);
• keep cash in reserve for a valuation shortfall, a rate change and furnishing; and
• decide early whether to buy personally or through a company, because the Code does not cover company purchases (see our limited company guide).

Several developments on our developments page are being sold ahead of completion, including Smithfield Lofts in Birmingham, targeted for Q4 2027, and Abbey Row in Liverpool, targeted for Q4 2028. Targets, prices and availability come from the developers and can change. PROXERA Wealth checks each opportunity against your plan and keeps the finance lined up with the completion timetable, and PROXERA keeps the documents and key dates in one account through to completion and beyond.