ARLA warns against off-plan investment
News Category: Industry News
Published: 07-Dec-2007
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Off-plan developments are not so much buy-to-let as buy-to-flip because they are speculative.
That's the assessment of the Association of Residential Letting Agents (ARLA), which said it had warned investors not to engage in off-plan developments in a press conference five years ago.
Commenting on those investors who had nevertheless bought into these schemes, ARLA's Malcolm Harrison said: "They have not taken advice – you can't even begin to gauge what the rental yield will be for something that isn't even built."
He added: "A buy-to-let investor should not do anything until he has seen the property and got a realistic valuation.
"Our definition of buy-to-let is buying residential property in the UK that you are going to let for the long-term. There are some people who go into it without taking advice and have bought off plan, and we say that's not buy-to-let, that's buy-to-flip because its speculation."
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