Some of the big names in house building and property development are thought to be assembling land banks using a mixture of private and bank financing. Many insiders in the property sector believe that although house prices may be fairly volatile throughout 2010 with prices bouncing along the bottom they will remain relatively constant on a year on year basis. So when the market turns those brave souls in the industry who have had the for thought to buy while the heard are selling, will be very well placed to ramp up the build phase and get the maximum profits when the upturns comes.
March 9, 2010
March 7, 2010
March 5, 2010
Ten things you need to know before you start a property renovation
1. Before you buy get a member of the Royal Institute of chartered surveyors to give you a full written report. They are the most experienced and best placed individuals to give you all the facts in an unbiased report. They have the skills and experience to then produce a schedule of works, once you have a schedule of works you can look for experienced contractors to undertake the renovation.
2. Choosing the right contractor : You should choose a contractor that has experience with the type of renovation that you are undertaking. They will be able to provide you with a fixed price quotation for all the items on your schedule of works. Your surveyor will be able to look at your contractor’s quotation and advise you on savings and specifications.
3. Start with the end in mind: Get a firm idea on paper of exactly what you want form your renovation project, take the time to think about finishes, floor heights, security systems, phone points, TV and audio points, the position of sockets, furniture, and how you will use the space.
4. Lead times: Certain items and renovation processes have lead times, drying times, importing times, and installation times, if your require new services you may not need them until the end of the project but they are some of the first things that need to be taken care of.
5. Budgets, funding and contingency: Winging it is NOT an option! One of the worst things that can happen during any renovation or conversion is running out of money. Money is the oxygen that a project needs to run efficiently, if funding gets too tight it often forces very poor decisions that can affect the end result and value of a renovation project.
6. Project phasing and works schedules: If you have your dream property but you do not quite have enough funds to safely carry out the renovation or development, it is a good idea to produce a schedule of works or phase the works. If you do this do not be tempted to do the nice bits first, do not fit the new kitchen and bathroom until the leaky roof has been repaired.
7. Set a sensible period of works: Good quality renovations of small commercial or large residential properties can take years, a complex renovation or conversion of listed buildings or buildings in a conservation area need to be agreed with the local authority conservation department. Liaising with a conservation officer can slow down vital stages in the project so make sure you allow enough time.
8. Follow your plans but follow your guide: Choose a surveyor and main contractor who will follow your plans and choices but be guided by their advice. It is truly the mark of a good contractor if they can lead and advise their client but remain mindful of following their wishes. Choose a contractor who will lead the project and manage the many components of a successful renovation or conversion. They are your one of your biggest assets so listen carefully to their advice and then make an informed decision once you have all the facts.
9. Passion and a commercial rational: Make sure you get what you want, but when spending tens of thousands of pounds always imagine yourself as an investor in the project. Peoples circumstances change, and if you chose to sell or change the use of your property would you realise the investment you have made?
10. Plan and enjoy: plan your project out as much as possible, make well thought out decisions early on and before a contractor is waiting on the phone for a decision. If you really want to enjoy your project and relax. The more you plan and research the more relaxed you will be during the renovation or conversion. Celebrate the milestones, spending that sort of cash always carries some level of stress, don’t wait until the end to celebrate enjoy the milestones along the way. Remember once you have finished a well planned project you will have something unique, something to be proud of, and some good memories!
March 4, 2010
Institutional investors look to fund residential investment developments
Some of the UK’s biggest property companies and investment funds are lobbying the treasury for alterations to the stamp duty regulations. It makes investors purchasing multiple residential property investments and residential investment property portfolios suffer a disadvantage in comparison with property investors who purchase single investment properties.
They are lobbying for a “residential property Reit”, as a special purpose investment vehicle in which to buy and hold residential investment properties. These “residential property Reit’s”, will be far more tax efficient than traditional investment property companies. The government is keen to encourage private investment funding for residential investment property developments. So should it make the efforts to adjust the tax system in favor of instructional property investors which will in turn increase the availability of social housing?
March 2, 2010
New build development for profit
House builders are starting to see the first signs of a recovery in the UK housing market, with the values of land gradually improving and their off plan sales improving they can see the first green shoots of recovery in the house building sector.
One of the remaining challenges for the sector is down valuing, when property surveyors are recommending lower property values than that estimate by the developers. The values of the finished homes on new build developments is the most critical number in a development appraisal these figures make up the GDV, gross development value. Once the land costs, build costs, and overheads are removed the remaining balance is the developer’s profit. If the property developer over estimates the final sales prices the results can be financially devastating for the development project and the property developer. With more land owners looking to complete joint venture as a result of a less fluid market for residential development sites, more and more investment consortiums are pawing through the figures and estate agents comparables to make sure the sums add up.
February 28, 2010
Building plots for sale in the midlands
There are many ways to find building plots in the midlands but many developers do not like to look at site that have been on the market for some time. The reason for this is that they believe that if the site or plot was a great deal one of their competitors would have already snapped up the site. The same applies for many vendors, those who own potential residential or commercial redevelopment sites often prefer to sell “off market”. There are various reasons for this but many spend time and money negotiating with potential purchasers who cannot actually buy the land or they will switch terms at a late stage in the land deal.
Many plot sellers prefer to deal with a broker or joint venture partner who they know is more likely to close the deal and deliver the profits. So many potential residential redevelopment sites are sold “off market”, through a closed network of established developers, main contractors and joint property development partners. Established main contractors have the experience and credibility that is required to obtain the essential property development or bank finance, so they offer an excellent opportunity for site owners who wish to share in the property development profits. They can also provide option agreements where the vendor allows the developer to arrange the planning application. This is often structured so that in exchange for a period of exclusivity in which the developer can purchase the site they arrange for the planning permission and there for secure the planning gain.
February 26, 2010
How can we make planning gains and build houses for profit with further development planning application controls?
The property planning system could be faced with further radical changes if we have a conservative government after the next election. Many property professionals have been long awaiting this green paper which aims to give the local community more influence over their local planning applications. The paper will almost defiantly see the use of Section 106 agreements decline if not see it scrapped completely. The Section 106 agreement is thought to deliver in the region of 40% of the affordable housing at this level.
The levels of speculative development and new house building sites are at their lowest levels for decades. With the availability of speculative property development funding also at its lowest levels for a very long time, is now really the best time to start tinkering with the planning system?
How to set up a joint venture property development
Joint venture property development are becoming increasingly popular as those who are looking to off load potential residential developments sites are finding it increasingly challenging to achieve their desired asking prices.
So land owners are looking to set up joint ventures with those that have the knowledge experience and track record of delivering past projects. The advantage of a joint venture is that you have a builder on board who is looking to save costs and push the project to completion to gain their share of the developer’s profit. The industry standard for this type of venture is often a 50 / 50 profit share with the land owner putting up the land as security and the developer or main contractor doing the construction or build phase of the project at cost. This helps with the project borrowing and banks are always keen to see an experienced developer or main contractor on the team. The days when banks were happy to fund first time developers are long behind us, and with the property developer funders having a choice of various deals to back, land and site owners are pleased to do a joint venture rather than see their site sold below market value.
February 14, 2010
Building Quotes, Building tenders, Building companies, all continue to fall.
The UK construction industry continues to see the price of their saleable commodity fall, as the price of building quotes and building tenders continues to fall. The knock on affect of these falls in building quotes and tenders is the fall of many building firms. The long period of uncertainty in the property market and the lack of suitable development funding have lead to many long established building companies falling by the way side.
Data has now confirmed the belief of many of the construction industry professionals that the construction industry sector continued to contract in the last quarter of 2009. Many believe we will leave 2010 before there are any signs of positive growth in the construction industry.
There is no doubt that the construction industries work load has been in decline for some time, many new planning schemes and speculative property developments have been either abandoned or placed on hold. The world of speculative property development is being held to ransom by the banking industry which in turn leaves the builders with nothing to build.
February 13, 2010
Property developments stay on track!
In considering commercial and residential developments with a railway connection, it is soon apparent that there is a wide range of railway connected developments that have taken place, and are still taking place. A small development can be just a new build house, or old railway station conversion to either a home/s or a business building. Such small developments can be, and have been progressed on closed (disused) railway branch lines, or even on an existing operational active railway line where a railway building, or small or large sized plot of land is sold, or it could be a redundant level crossing keeper’s house which is no longer required for railway purposes because the level crossing is now an unmanned automated level crossing.
A medium sized development with a railway connection can be a residential development such as the one built at York on the site of the former railway Carriage Works (Train Building Factory).
A very major building/railway development can be something like St. Pancras Railway Station in North London. This was a major development when the station was first built, as it is said to have taken 60 million bricks to build before the first ever train could leave in October, 1868, let alone the recent extremely large development making St.Pancras a major international travel facility of which more is referred to below.
The relatively recent major conversion of St. Pancras to “International” status is very good news for the Midlands and Yorkshire as not only does this railway station continue to serve Derby, Leicester, Nottingham, and Sheffield, and other intermediate locations with its inter-city services, and with local passenger trains providing various connections to many other locations, but also now provides a fast Eurostar train service to Europe. This makes those locations mentioned above, and surrounding locations, extremely attractive areas to live and work and conduct business from which consequentially is likely to cause increasing demand on housing and business developments in the Midlands.