The danger of buying ‘off plan’ homes: When Jasmine, 38, saw designs for a two-bedroom apartment in a new development, she thought she’d hit the jackpot. But she ended up LOSING her entire £108,000 deposit…

When Jasmine Janda, 38, saw plans for a two-bedroom apartment in a new development set to be built in Ealing, west London, she thought she’d hit the jackpot.

The modern flat, located in Westgate House, came with perks including a 24-hour concierge in the lobby, an onsite gym, sauna and steam room, a cafe, cinema room, communal workspaces and lounges. It also had fast links to central London, where Jasmine worked in banking.

So when she successfully negotiated a £25,000 discount on the flat with the housebuilder Galliard Homes and agreed to buy it for £540,000 in August 2019, she was delighted.

Jasmine put down a 20 per cent deposit – £108,000 – on the property.

By buying off-plan, Jasmine was agreeing to exchange contracts before the property was fully built, which was due to be in 2021.

She paid a £2,000 reservation fee to secure the flat and exchanged in December 2019, paying the first £52,000 instalment of her deposit. A year later, she paid the remaining £54,000.

What she didn’t realise at the time – and her solicitor had failed to warn her about – was that the flat would prove unmortgageable. She would go on to lose the full deposit – her entire life savings – and her dreams of homeownership came to a crashing halt.

This is because Jasmine had entered a legally binding agreement to buy the home when she exchanged contracts. Anyone who fails to fulfil this must pay a penalty. In Jasmine’s case, it meant she lost her deposit and with it her hopes of ever owning a home in the capital.

It was only after paying her deposit as the property neared completion in spring 2021 that Jasmine discovered this. She signed up with an independent mortgage broker, recommended by Galliard Homes, to secure a mortgage on her new home.

But she was shocked to find that no bank or building society was prepared to offer her a mortgage. Jasmine was rejected by lenders including NatWest, Halifax, Accord and Hinckley and Rugby Building Society.

Each time a lender instructed surveyors to carry out valuations on the property, they deemed it an ‘unsuitable security’.

Reasons included its location next to the busy Hanger Lane gyratory system and its proximity to other major roads and rail lines.

They also said the property had limited natural light and had concerns over future resale values because it was an office-to-residential conversion.

With nowhere to turn, Jasmine says she was encouraged by a broker recommended by Galliard Homes to secure an expensive specialist mortgage that required a significantly larger deposit and charged much higher interest rates.

‘At one stage I was asked to find an additional £132,000 to complete the purchase,’ she says.

‘I was told these products still carried no guarantee that the property would pass valuation. I refused. This was money I simply did not have or could raise.’

Unable to complete on the property, Galliard Homes rescinded the contract, pocketing Jasmine’s entire £108,000 deposit and leaving her with nothing.

‘This was meant to be the start of a happy part of my life and I planned to live in London for ever. This experience has had a devastating impact.’

Jasmine, who has since moved to Coventry and had a baby, says the stress, uncertainty and constant pressure surrounding this purchase have never gone away.

‘I have not stopped thinking about that flat,’ says Jasmine. ‘Sometimes I wake up thinking it hasn’t really happened to me. Like it was all just one big nightmare.

 ‘I had never heard of a property in London and in a prime location being unmortgageable.

‘I did give up hope of ever buying in London, and was scared of ever trying to buy another flat again. Even when I met my husband, we still could not afford anything combined.’

Nicholas Mendes, mortgage technical manager at John Charcol, says the risk of a property being unmortgageable is much higher with off-plan purchases, particularly where there can be a gap of two, three or even four years between exchange and completion.

He says: ‘Office to residential conversions like this one attract extra scrutiny. A lack of natural light, noise from busy roads or a nearby gyratory, and how sale prices for similar properties compare all feed into a valuer’s judgment, and a converted scheme can face more caution than a standard new build.

‘The reliance on a developer’s recommended broker and solicitor is the other significant issue here.

‘Independent advice sourced by the buyer, rather than pointed towards by the seller, gives a much clearer, unconflicted read on whether a property is likely to be mortgageable by completion, not just whether the buyer is.’

During conversations with the developer’s recommended mortgage adviser, Jasmine claims she was told that other buyers at the same development were experiencing similar problems.

Galliard Homes appears to have struggled to sell the flat along with many others at Westgate House.

For five years, Jasmine has tried to recover her £108,000 deposit, spending an additional £9,154 between December 2021 and October 2025 on legal fees – but to no avail. Galliard Homes’ contract was watertight, she says.

Poor advice

During the purchase, Jasmine claims she was told she couldn’t use her own solicitor.

‘I was told I wasn’t allowed to appoint my own solicitors as Galliard only worked with a list of approved solicitors,’ says Jasmine.

‘Throughout, I experienced significant delays, poor communication and repeated pressure to exchange contracts despite my legitimate concerns about the property and the contract.’

Olivia Egdell-Page, a partner and head of the property department at law firm Joseph A Jones & Co, says that buyers are under no obligation to take on solicitors approved by the developer.

‘Developers instruct their own solicitor to set up the legal framework and prepare the sale documents,’ she says.

‘They may recommend approved solicitors who know the development, its title and planning history, but you are entitled to choose your own solicitor.

‘This ensures you receive advice tailored to you and can make an informed decision about whether to proceed.’

Overpriced homes

While many flats did sell at Westgate House in 2021 at similar prices to the one Jasmine had agreed, a significant number sold for much less.

Jasmine’s flat, 230 Westgate House, only sold in June 2025 for £295,412 – at 45 per cent less than she had initially agreed to buy the property for six years earlier.

A spokesman for Galliard Homes said it was ‘sympathetic to Ms Janda’s circumstances’, but ‘rejected the suggestion that Galliard knowingly sold a property that could not be mortgaged’.

They said: ‘Ms Janda purchased through an independent agent and exchanged in 2019.

‘By completion, the lending environment had changed significantly, with Covid, Brexit-related uncertainty and changes in lenders’ appetite and exposure.

‘Galliard introduced independent mortgage advisers with knowledge of the development to help purchasers identify available options.

‘The use of these advisers was entirely optional and purchasers remained free to appoint their own advisers and solicitors. Mortgages were obtained by purchasers at the development.

‘The subsequent sale [that has been cited] took place several years later, in materially different market circumstances, and does not provide a like-for-like comparison with the price agreed in 2019.’

What are the risks of buying new-build?

There is always risk involved when you buy a property that is still being built.

If the completion is delayed, buyers often have to re-apply for their mortgage as most offers only last for six months.

The developer could also go bust before the building is finished, putting a deposit at risk if it is not protected.

Property prices could also fall during the construction period, meaning buyers could end up with a lower valuation at completion than the price they agreed.

As in Jasmine’s case, buyers can also uncover mortgage issues, which might result in them being unable to complete and therefore, forfeiting the deposit they paid when exchanging contracts.

Mortgage broker Nicholas Mendes says: ‘Lender appetite, valuation evidence, and criteria can all move considerably in that time, so an early agreement in principle should never be treated as a guarantee that the finished flat will be mortgageable at the loan to value required.

‘Off-plan buying is not inherently unsafe, and plenty of purchases complete without issue on well-established developments with a track record of lenders backing them.

‘But buyers need to understand that the mortgage position is not settled until the lender is comfortable with the completed property, not just the borrower.’

How to avoid losing your deposit off plan

Sam Smith, of Property Hub, says buyers need to make sure their deposit is protected – either with a warranty or held by a third party – in case the developer goes bust or they can’t get a mortgage on the property.

Warranty providers rarely guarantee a deposit above 10 pc, so putting down more than this puts it at risk.

Mr Smith also says it’s worth contacting a mortgage broker before paying any deposit to check whether they think there could be issues obtaining a mortgage.

‘It may cost you a few hundred pounds but it could save you tens of thousands in the long run.’

Mr Smith also suggests looking at what similar properties are selling for before reserving a property off-plan.

Ms Egdell-Page adds new-build off-plan buyers should carefully check the property details.

‘Most sale contracts allow you to withdraw if the developer makes material changes to the specification, materials or finish so that the property substantially differs from what you were shown at exchange.’

What has been your experience of buying off plan? moneymail@dailymail.co.uk