Traditional landlords ditching vanilla investments in favour of off-plan


As the buy-to-let sector continues to be targeted by the government, with tax changes, increased lending scrutiny and new licensing laws, some landlords are reducing their portfolios or even leaving the sector – but swathes of savvy investors are switching to new opportunities in off-plan investments.

The number of buy-to-let mortgages taken out in the final quarter of last year fell to 12.5% of total lending, down from 14.4% the previous year, according to the Bank of England – a dip that could be linked to the new rules brought in by the Prudential Regulation Authority in September that introduced stricter underwriting processes for portfolio landlords.

However, the private rented sector continues to grow, as does the number of people searching for rental accommodation. The fall in lending can be explained in a number of ways – there are new methods of investment in property, such as crowdfunding, while cash buyers continue to make up a large proportion of investors, particularly as more landlords cash in on their mature London investments and re-position themselves in the emerging markets of the north.

Top challenges for landlords

Landlords have faced a number of challenges in recent months, and continue to do so. For example, from next month, landlords will only be able to offset 50% of their mortgage interest payments against their tax bill, reducing to zero by 2020 (known as Section 24); minimum EPC ratings of E will be required on all rental properties, meaning some properties will need added investment; and more landlords will soon need to apply for licences, particularly for HMOs.

A better investment

However, it is not all doom and gloom for the sector, as the vast majority of buy-to-let landlords intend to stay in the market, and almost half (44%) still plan on growing their portfolios in the first half of this year, according to Mortgages for Business.

To counteract the extra costs levied on landlords due to the government’s changes, it is nevertheless imperative that they find the best, most high-yielding investments for the future, which is why many are now turning towards off-plan developments in up-and-coming and emerging markets.

Looking outside London

Manchester, which has been named one of Europe’s fastest growing cities by Deloitte, is one of the most important cities outside of London, having seen house prices jump by 6.7% over the past year, according to Hometrack – with further hikes of more than 20% to 30% expected over the next two to three years. With the north-west in general expected to see property prices rise by around 18% by 2022, compared to London’s 7.1% growth forecast, Preston is another exciting emerging market that is expected to see a snowball effect in the coming years.

Meanwhile, the West Midlands, and Birmingham in particular with the upcoming Commonwealth Games 2022, is about to see huge investment from both public and private sources, and investors and landlords are already snapping up opportunities in the region.

Off-plan opportunities

Buying off-plan property in these areas is enabling landlords and investors to secure high-quality, well-located properties before they are built at the most competitive prices, as opposed to buying second-hand or after completion – meaning maximum potential profits. Many such properties are designed to be rented out – build-to-rent, a sector which has grown fivefold since 2013 according to BPF and Savills – and some come with assured net yields for the investor. And in terms of one of the upcoming pitfalls of owning a rental property, the minimum EPC rating, investing in a new-build development means owning an energy-efficient property, which will also be a huge draw for potential tenants looking for a modern home.

To see some of the opportunities currently available for investors and landlords, as well as owner-occupiers, see our investments page.

CityGreens, Solihull, Birmingham

City-style apartments directly on Birmingham's largest park

  • Limited pre-launch prices.
  • ZERO ground rent
  • Excellent tenant demand

£182,000 - £419,000

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free


Traditional landlords ditching vanilla investments in favour of off-plan


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.