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Should You Buy Off-Plan for 2021?

If you haven’t already, you should probably start thinking about your investments for next year. As 2021 rapidly approaches, now is the perfect time to sit back and take stock. With diversification so important in today’s climate, we’re asking the question: should you buy Off-Plan for 2021?

It’s a common query that appears time and time again across the industry. Offering unique advantages for investors over the long-term, an Off-Plan property – when paired with a quality location – can be ideal for maximising returns from an emerging market. With that in mind, you also need to consider if the property market forecast in 2021 and beyond suits buying off the plan.

Buying Off the Plan for Investment

Since Off-Plan properties are bought during development, the key advantage many investors find is the opportunity for it to grow in value by the time it’s been built.

If you choose to invest in an area that is building new amenities nearby, has access to plenty of desirable job opportunities or is used as a commuter hotspot, this chance of capital growth is increased.

A prime example of this is our Off-Plan development The Grand Exchange. Alongside an incredible regeneration plan transforming the town centre, this development will be ready to take advantage of the 17.5% capital growth forecasted for the region by 2025.

At the same time, because of its position as a cornerstone of the UK technology industry, it’s also experiencing high levels of demand from tenants that travel or even move for work. Whether this growing young workforce is working in the local area or travelling to London, they want the affordability Bracknell can offer. Similarly, the expected rental yields in Bracknell are forecasting excellent returns for investors that want to build long-term returns.

This clearly demonstrates the strengths of buying off the plan – our example development is predicted to grow in value, be in high-demand with tenants and is nearly half the price of London despite offering double the potential rental yields.

The Grand Exchange

Benefits of Off-Plan Investment in 2021

The benefits of buying Off-Plan aren’t restricted to your location either.

Because of the way they’re built and bought, many Off-Plan properties are new-builds and thus, desirable for tenants. This has never been more important in the current market. The effects of Coronavirus on the property market means that more people than ever are analysing where they live. 

Looking ahead to 2021, if you want a property investment with consistent demand, a new build, off-plan property is a great place to get started. People are spending more time at home than ever before. This means that it’s vital to have attractive and practical surroundings – something a new-build can offer.

These property types also tend to have all of the mod-cons that the modern renter is looking for. From new appliances to modern, stylish interior design, outdoor spaces and parking, you can typically find a quality development that will remain desirable in the long-term.

This is especially true of young professionals – a major demographic in the rental market. For these renters, a fresh, new-build apartment is a common first step and the age of the property could be a major selling point, meaning more demand. 

Similarly, renters are increasingly looking for more space and the modern touches that make day-to-day life a breeze, whether that’s extra floor space for a ‘work-from-home’ office or a balcony to enjoy some fresh air.

If you can buy an off-plan property that is completing soon, even better. This gives you that extra peace of mind that you’ll have a running investment but also provides the benefits of value growth during the final stages of build.

Should You Invest Off the Plan in 2021?

This brings us to the crux of the issue. Should you be investing in Off-Plan property in 2021?

While it always depends on your individual circumstances, there can be no denying that the potential for both price and rental growth is appealing. 

The UK property market is currently experiencing a mini-boom largely driven by government support and pent-up demand. This means that growth predictions for the remainder of 2021 are currently trending positively.

Of course, for investors this also means the opportunity is still available to make savings on Stamp Duty Land Tax as well as take advantage of historically low interest rates.

Investors could find savings of up to £15,000 just on Stamp Duty depending on where they buy, especially in areas where market is at the higher end of the 0% tax bracket.

In terms of rental growth, the UK is also predicted to see rises. This is expected to continue over the next four years as new regeneration and rising property prices attract new investors and renters. As we all know, supply and demand directly impacts the rental market and Bracknell is currently predicting much more demand than supply – a positive sign for investment. 

Finally, investing in a quality off-plan apartment will typically offer stronger performance over a long-term strategy, delivering consistent returns and taking advantage of the huge growth being forecast for the UK market over the next four years and beyond.

With the UK expecting its currency to grow in value as the wider economy recovers, now is the perfect time to invest for those that want to maximise returns.

Are Investors Still Choosing to Invest in Off-Plan Property in 2021?

As we re-evaluate our investments, it’s always a good idea to consider whether assets are growing in popularity. While we’ve discussed whether you should invest in Off-Plan, how are other people investing?

According to our research, 58% of enquiries over the last 3 years have been for Off-Plan developments, showing the consistency of the asset class.

Offering both capital growth and rental yields upon completion highlight how flexible the investment vehicle is, while future growth potential in emerging markets means there’s a number of diverse locations to choose from.

Overall, 75% of our investors have chosen to invest Off-Plan over the last 3 years and we expect this to continue, especially as market demand shifts towards amenity-led developments in up-and-coming areas.

The Grand Exchange

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