Investing in off-plan property is becoming more and more popular. Some property investors view it as a risk to buy a property months or years before completion. However, there are many benefits for investing in off-plan property, presenting many opportunities to property investors.
Here’s a few of the top reasons why you should invest in off-plan property.
Potential of capital growth
For starters, when investing in off-plan property, buyers can sometimes benefit from discounts or other benefits, such as being able to customise the property. Additionally, the price of the property could increase throughout the build. This could provide instant equity to the property investor right after completion.
Capital appreciation is never guaranteed, and a medium to long-term strategy is still recommended. Capital growth is often down to location. Cities that are highly sought after with strong housing demand, growth prospects and upcoming investment often see property prices rise.
In recent years, Manchester has performed particularly well. According to Zoopla’s April House Price Index, this city in the North West saw the second highest annual rise in house prices with an increase of 6.8%.
Additionally, Savills forecasts the North West to lead UK house price growth in the next five years with a rise of 28.8% across the five years to 2025. This strong house price projection is slated to hit Manchester as well.
Strong rental yields
There has been increasing demand for housing across the UK, including Greater Manchester. With demand continuing to outweigh supply, there is still a need for more high-quality rental accommodation.
With an aim to meet the increasing demand for housing, the government has a goal of building 300,000 new homes each year by the mid-2020s. However, England is behind on meeting this target. Because of this under supply of housing paired with strong demand, investors can often achieve strong rental yields for high quality off-plan properties.
New builds are often more attractive to tenants compared to older properties. Many off-plan properties are designed as build-to-rent developments, providing appealing amenities and facilities in prime locations.
Increasing demand for city centre properties
There is an increasing appetite for city living across the UK. City centre locations in particular are seeing a rise in rental demand post-lockdown. Certain cities in the UK, including Manchester, are expected to see population growth and further increase in housing demand in the coming years.
Investing in areas with strong demand and consistent growth often delivers strong returns for property investors, so off-plan developments in these areas can prove to be effective property investments.
Future-proofed property investment
New builds from reputable property developers are being built to the latest environmental and safety standards. Where developments are being built out to the highest of standards, these can provide future-proofed property investments.
The majority of new builds have an A or B energy performance rating, making these properties more energy efficient than most existing properties. Currently, rental properties must have at least an EPC rating of E. The government has also talked about requiring properties to reach an energy efficiency of C for new tenancies by April 2025 and all rental properties by April 2028.
With these changes on the horizon, off-plan property provides a more future-proofed investment. Many modern tenants are also putting more importance on living in newer, greener properties, making new builds appealing for buy-to-let investments.
If you are interested in purchasing a property off-plan in Greater Manchester, check out the property developments available through Salboy. Send us a message online or give us a call on +44(0) 161 884 3183.