Protect your home deposit

Buying off-plan property - property that hasn't been constructed yet - in the United Kingdom can be a great investment, but you have to make sure you know what you're signing up for and have considered all the risks beforehand.

The first major thing to consider is deposit protection. If the developer doesn't complete your property or becomes insolvent, you must ensure the contract has protection so that you don't lose your deposit.

There are two ways to do so. The first is to ensure that your deposit is held in escrow until the transaction is completed. Another way is to ensure the developer has an insurance policy that will return your deposit if the property is not completed.

A second point to consider is insurance and building warranties. Developers should be able to provide a construction warranty guarantee, which is a form of insurance against defects. Think twice before buying new property without this protection.

This insurance should also provide protection for the 10 percent deposit if the developer becomes insolvent and doesn't complete the property.

Several companies offer this kind of protection, such as NHBC, Zurich Insurance and Premier Guarantee.

Investing is a risky business so erring on the side of caution is always a good idea.