Off-Plan in London: Deposits, Exchange, Warranties and the Building-Safety Checks to Make
Buying off-plan in London means committing to a flat before it is finished, sometimes before it is started. You typically pay a reservation fee, then about 10% of the price at exchange, and possibly further stage payments that can bring the total to around 30% before completion. In return you lock in a price and a specific flat, and the contract gives you a long-stop date after which you can walk away with your deposits if the building is not delivered.
The protections are real but specific. A 10-year new-home warranty normally covers loss of your deposit if the builder becomes insolvent before completion. The Building Safety Act 2022 makes completion of most London towers depend on a regulator’s sign-off. And the lease, the specification and the service charge budget are all set out in documents you can read before you are bound.
This guide takes the checks in the order you meet them, as of October 2026. It does not repeat the full buying process, which is in our step-by-step guide to buying from abroad.
How the money moves on an off-plan purchase
| Stage | What you pay | What protects it |
|---|---|---|
| Reservation | A reservation fee set by the developer | A 14-day cooling-off period if the developer is registered under the New Homes Quality Code; after that the fee is at risk |
| Exchange | Usually 10% of the price, less the reservation fee | The warranty’s pre-completion cover against builder insolvency; how the deposit is held |
| Construction | Possible instalments of 5% or 10% every 6 or 12 months, up to about 30% in total | The same warranty cover, within its limits; the long-stop date |
| Completion | The balance of the price, plus Stamp Duty Land Tax | Snagging inspection; the warranty’s defects cover begins |
The reservation agreement
The reservation agreement takes the flat off the market and sets a timetable for exchange, which is often only a few weeks away. For developers registered under the New Homes Quality Code, the agreement carries a 14-day cooling-off period in which you can cancel and get the fee back. After that you can still cancel, but the developer may keep reasonable costs it has disclosed. Version 2 of the Code applies to homes reserved from 2 March 2026.
Not every agreement is that forgiving. Many are binding, and if you walk away you lose the fee except in limited circumstances. Typical fees run from £10,000 to £50,000 depending on value. Ask which code the developer is registered under, read the refund clause, and treat the fee as at risk once any cooling-off period ends.
The contract: variation, long-stop and completion
Your solicitor reviews the draft contract and lease before exchange. Three clauses deserve your own attention, not just your lawyer’s.
The right to vary
Off-plan contracts let the developer vary the finished size, design and specification of the flat within limits. Ask what the limits are: how much smaller the flat can be, which materials can be substituted, and whether you have any remedy if the change goes beyond them.
The long-stop date
The contract states an anticipated completion date and a later long-stop date. If the flat is not built by the long-stop date, you can end the contract and recover your deposits. The anticipated date is the developer’s estimate; the long-stop date is the one that gives you the right to cancel.
Notice to complete
When the flat is ready, the developer serves notice to complete, usually giving 10 working days to pay the balance. That is a short window for a buyer whose funds are abroad or whose mortgage offer has to be renewed, since offers typically expire three to six months after issue. Have the money and the loan lined up before the notice arrives.
Check the ground rent at the same time. Most new leases granted since 30 June 2022 carry a peppercorn ground rent, but the rule does not cover leases granted under contracts exchanged before that date, which can matter on long-running schemes.
Deposit protection and the 10-year warranty
New homes are normally sold with a 10-year warranty from a provider such as NHBC (its Buildmark policy), Premier Guarantee or LABC Warranty, and mortgage lenders require one. Buildmark has three stages:
- From exchange to completion, cover for loss of your deposit, or for the extra cost of completing the home, if the builder becomes insolvent.
- In years one and two after completion, the builder must put right defects you report, with NHBC standing behind that obligation.
- In years three to ten, insurance for damage caused by defects in specified parts of the home, such as the structure, subject to a minimum claim value.
A warranty is not buildings insurance, and the cover has limits. Lenders expect at least 10 years’ cover, with the first 24 months covering Building Regulations non-compliance and developer liability including insolvency, and months 25 to 120 covering weather-tightness, structure and new drainage.
Ask your solicitor two questions. Which warranty covers this building, and up to what amount does it protect deposits? And how is your deposit held: by a stakeholder until completion, or released to the developer? The answers decide how exposed you are if the developer fails.
Building safety before handover: gateways, delays and second staircases
Most London towers are higher-risk buildings under the Building Safety Act 2022, meaning at least 18 metres or seven storeys tall with at least two homes. Since 1 October 2023 such a building cannot start construction without approval from the Building Safety Regulator, known as Gateway 2. After construction the regulator must issue a completion certificate, Gateway 3, and the building must be registered with the regulator before anyone moves in; occupying it earlier is a criminal offence.
The regulator has been slow. The statutory target for Gateway 2 on a new build is 12 weeks, but approvals averaged 25 weeks in early 2025, legacy cases had a median of 37 weeks by the end of that year, and times improved somewhat in 2026. Do not rely on any handover date beyond what your contract says.
Two newer rules affect schemes now in the pipeline. New residential buildings of 18 metres or more need a second staircase; the transition period ended on 30 September 2026, with schemes already submitted and sufficiently progressed protected. And a Building Safety Levy, charged on new residential buildings per square metre of floorspace at rates that vary by local authority, applies from 1 October 2026 and is payable before completion or first occupation. Buyers do not pay the levy directly. For Berkeley Group, a London apartment building now takes at least eight years from acquisition to completion, against five years a decade ago.
Building safety after handover: accountable persons and costs
Once residents move in, a higher-risk building has Accountable Persons, including a Principal Accountable Person, who are legally responsible for fire and structural safety. They must assess and manage the risks, prepare a safety case report, keep the “golden thread” of building information, run a residents’ engagement strategy and a complaints system, and give residents fire-safety information on request. The regulator can also direct the building to obtain a building assessment certificate, which must be displayed in the building.
This work costs money, and the cost typically flows into the service charge. Ask the developer for the service charge budget for the first year, how much of it relates to building-safety duties, and the budgeted charge per square foot. Our running costs guide explains what else the service charge covers.
Older buildings carry a different history. After Grenfell, UK Finance, the Building Societies Association and RICS introduced the EWS1 external-wall review in December 2019 for blocks of 18 metres and above, and lending on many flats stalled until government guidance narrowed the number of buildings needing one; major banks resumed lending on affected flats from January 2023. Building Safety Act protections, in force since 28 June 2022, shield qualifying leaseholders in existing buildings from cladding remediation costs and cap other historical safety costs. Major developers, including Berkeley on 13 March 2023, signed the government’s Self-Remediation Terms covering life-critical fire-safety defects in buildings they developed in the 30 years to April 2022. For a new build, ask for the completion certificate and the registration; for a resale, ask for the building’s fire-safety and remediation status.
Price, valuation and tax risk
Off-plan buyers commit at today’s price for a completion that can be years away. London’s average price fell 3.3% in the 12 months to July 2026, the eleventh consecutive month of annual falls. In 2025, 19.9% of flat sellers in England and Wales sold for less than they paid. In the year to April 2026 Berkeley Group sold into a cautious market with little urgency, and its off-plan sales suffered more than sales of finished homes.
If you borrow, the lender values the flat at completion, and a lower valuation leaves you to fund the gap. Stamp Duty is charged at the rates in force at completion, not at reservation; our figures are as of October 2026, before the Budget on 28 October 2026, and announced measures are not law until legislated. And every payment is in pounds, so a buyer funding from another currency carries exchange-rate risk on each stage payment and on the completion balance.
The off-plan checklist
- Is the developer registered under the New Homes Quality Code, and what does the reservation agreement say about refunds?
- What are the exchange deadline, the deposit at exchange and the stage payment schedule?
- What are the anticipated completion date and the long-stop date, and what happens if the long-stop date passes?
- How far can the developer vary the size, layout and specification?
- Which warranty covers the building, what is the limit on deposit protection, and how is the deposit held?
- Has the building passed Gateway 2, and is the developer’s timetable consistent with the regulator’s approval times?
- What is the first-year service charge budget, including building-safety costs?
- Is the ground rent a peppercorn, and when was the developer’s original contract exchanged?
- Can you fund the completion balance and Stamp Duty if the valuation or the exchange rate moves against you?
For tenure questions, see our guide to leasehold and freehold. Current London homes are on our properties page.
