I purchased a property off-plan in 2023: Can I withdraw or re-negotiate given the developer is now promoting the identical houses for under what I paid?

I bought a property off-plan in September 2023. At least that’s when we exchanged contracts. 

Now we are fast approaching completion and the property market in the location I am buying seems to be in turmoil. 

I paid a 10 per cent deposit when I exchanged and now I need to pay a further 30 per cent to complete with the mortgage making up the remaining 60 per cent.

Is it too late to withdraw? If so, what are my chances of negotiating anything off the agreed price as I have evidence that the developer is now offloading homes in the development for less than I paid for it over two years ago.

Also, I exchanged for £365,000. Given that I exchanged in September 2023 when stamp duty rates were lower, does this mean I’ll pay £16,700 rather than £26,500 that would be payable if I was exchanging today? 

It’s a second property purchase and I have not sold my current home.

Ed Magnus of This is Money replies: You won’t be alone in this situation. Property prices in general have rather languished since they peaked in the summer of 2022. 

In some locations they have fallen and, unfortunately for you, it sounds like you are buying in such a place.

Buying off-plan – prior to the property being built or completed – always carries some risk, not least because the developer might go bust or there could be major delays.

One would hope that prices would rise while you wait for completion, but sometimes the market will turn against you such as is the case now.

Given that you have exchanged contracts, it’s highly unlikely you’ll be able to withdraw without losing your deposit.

Re-negotiation will be difficult, given the developer is entitled to the 10 per cent you have already paid. However, that doesn’t mean it’s not worth trying to re-negotiate.

Some property investors are describing the best market conditions they’ve seen in over a decade, reporting new build discounts as high as 17 per cent.

Even if negotiation fails, my advice would be not to panic. It’s always tempting to sell when prices are falling, but it’s arguably the worst possible time to do so.

If you’re in it for the long-term, chances are the situation will improve and prices will start to rise again.

In terms of the stamp duty, it sounds like you might be buying this an an investment or second home.

Stamp duty has been increased on two occasions since you exchanged in September 2023.

First, in October 2024, when Rachel Reeves increased the stamp duty surcharge payable on second home purchases from 3 per cent to 5 per cent.

Most recently, all home buyers were hit by a stamp duty hike from 1 April 2025, as Labour opted not to extend a tax break that had been in place since 2022.

Since that date, stamp duty has returned to kicking in on the portion of a property’s purchase price above £125,000, down from £250,000 previously.

Stamp duty starts at 2 per cent above a threshold of £125,000 and then steps up to 5 per cent above £250,000. 

The second home surcharge is then added on top and charged on the entire purchase price.

For expert advice, we spoke to Ian Futcher, financial planner at wealth management firm Quilter, Lorna Hopes, mortgage specialist at the chartered financial advisers Smith & Pinching and Jessica Garbutt, consulting accountant at Property Tax Advice & RiverView Portfolio.

Can they still withdraw? 

Ian Futcher replies: Buying off plan can feel daunting when the market moves against you and you are committed to a price agreed long before completion. 

Once you exchanged contracts in 2023 the deal became legally binding, and that matters. 

Pulling out after exchange is almost always a bad outcome. You would nearly certainly lose your deposit, and the developer could also pursue you for any loss if they later resold the property for less. 

They may also claim reasonable costs such as legal fees and marketing expenses. 

The system is designed to give both parties certainty at exchange, and withdrawing after that point is usually financially painful for the buyer.

Lorna Hopes replies: This is a challenging situation and I sympathise with you. There are no easy options, but you do have options.

Let’s start with the legal position. The contract you signed back in 2023 committed both you and the developer to a transaction. 

That doesn’t mean you have to complete the transaction now, but it does mean that you will face a financial penalty if you pull out.

For you, the financial hit would be significant. You’d lose your 10 per cent deposit – £36,500 – and you may also have to reimburse the developer’s conveyancing fees, which could amount to a few thousand Pounds.

Can they re-negotiate on price? 

Ian Futcher replies: If you are worried about paying above current market value, it is much better to approach the developer than to consider walking away. 

Developers can be pragmatic in weaker market conditions, particularly when faced with evidence that comparable units are being advertised for less. 

While they do not have to renegotiate, many would rather secure a committed buyer than reintroduce a property into a softening market. 

It costs nothing to ask, and in your situation you have far more to lose by abandoning the contract entirely than by exploring whether the developer will meet you part-way. It really is a case of ‘don’t ask, don’t get’.

Lorna Hopes replies: By pulling out you would hurt the developer. 

While they would get to keep your deposit, your withdrawal would suddenly force them to find another buyer for ‘your’ home. 

You said the local property market is ‘in turmoil’ and that the developer is trying to ‘offload’ unsold properties by slashing prices.

In that context, it’s unlikely they would relish having another unsold home. 

As a project nears completion, developers are often under pressure to sell all the outstanding units to free up the money they need to build their next development.

So it’s possible that the developer would prefer to renegotiate the price with you rather than lose your sale entirely.

This may not be entirely plain sailing though. Because you’ve exchanged contracts, you’d need to get your conveyancing solicitor involved. 

Once you’ve agreed a new price with the developer, your solicitor could amend the final price shown in the contract through what’s called a Deed of Variation.

I suggest that you get the ball rolling by asking your solicitor to approach the developer on your behalf. 

They should provide evidence – such as estate agent listings – that the developer is selling similar properties for less than what you agreed to pay for ‘yours’.

If you’re lucky, the fear of losing your sale will be enough to bring the developer to the negotiating table.

What if they are not willing to negotiate?

Lorna Hopes replies: If they’re not, you’ll have to decide whether you walk away and sacrifice the 10 per cent deposit, or grit your teeth and complete at the price you originally agreed. 

While paying more for your home than your new neighbours did for theirs might stick in your craw, at least you’d have the satisfaction of a cheaper mortgage than you originally will have budgeted for.

Fixed interest rates have come down a lot since 2023, and at a 60 per cent loan to value ratio you may be eligible for the very best rates. 

What about the stamp duty position? 

Ian Futcher replies: On stamp duty, the position is clearer. SDLT is generally assessed on the rules in force on the day you complete, not the date you exchanged. 

The only exception is where the government has introduced specific transitional rules for a particular change.

That happened with the Autumn Budget 2024 increase in the additional home surcharge, which rose from 3 per cent to 5 per cent. 

Buyers who had already exchanged before the announcement date were allowed to keep the old 3 per cent rate even if they completed later, provided the contract was not substantially varied. 

Because you exchanged in 2023, you remain protected by those transitional rules and will pay the 3 per cent surcharge rather than the 5 per cent rate now in force.

But the rest of your SDLT bill will be based on today’s thresholds. The temporary bands introduced in 2022 expired on 31 March 2025, and there is no exchange-based protection for those. 

As you are completing after that date you will be assessed entirely under the standard post-April 2025 regime, which is higher than many buyers were expecting when they exchanged during the temporary relief period. 

Your solicitor can confirm the exact figure based on your anticipated completion date.

Finally, note that the surcharge is only refundable if you buy a new main residence and sell your old one within three years. 

So if this will be your main residence the clock will start ticking on the sale of your other property.

Jessica Garbutt adds: Assuming the purchase is a residential property purchase in England, the SDLT rates applicable to this transaction will largely depend on whether the contract has been varied since 30 October 2024.

If the contract has not been varied since 30 October 2024, and the effective date of the transaction – often the completion date – falls on or after 1 April 2025, as is likely in this case, the higher rates will apply at a rate 3 percentage points above the permanent residential rates that apply to transactions from 1 April 2025.

If, however, the contract has been varied since 30 October 2024, the additional rate at 5 per cent will apply.