exchanging contracts (with say a 10% deposit) prior to practical completion is the norm - this is obviously different to putting down a ?1,000 deposit which reserves your plot, this may or may not be returnable.

The thinking is that in a rising market (last 10 years) you get in early and get a discount on the price mainly because you are helping the developers cashflow. Again, in theory, you would complete the purchase (having exchanged 3 - 6 months ago with a 10% deposit) once your unit was complete at which point you would of had six months groth etc and be able to (a flip the unit on at a profit or (b let it out depending on whether you were an investor or owner occupier.

There has been no perceived risk in buying off plan until now and as such I would imagine that people are being biten by it left right and centre. The reality is that once you have exchanged you either complete or lose your deposit - simple as that!