Building Solutions (Midlands) Blog » Property development funding

How to buy houses below market value

Richard — Sun, 25 Jul 2010 15:38:45 +0000

There are several ways to obtain houses below market value, but most methods require a high amount of time and commitment. They range from courting your local estate agent through to attending all the local property auctions. There are some companies that can provide portfolio building and source below market value properties. Some of these companies have suffered in recent times as their operations have become hampered by the recent drought in the buy to let mortgage lending’s markets. If you do chose to invest in below market property in the Midlands, Derby, Stoke-on-Trent, Belper, Ripley, Heanor, of Alfreton and the surrounding areas. There is one company with over 12years trading history and an enviable network of contacts within this area. ambervalleyhomes

Should I buy a house at auction?

Richard — Fri, 09 Jul 2010 19:39:22 +0000

As with any house purchase there are positives and negatives, buying a house at auction is no guarantee of a bargain, but most are sold for an attractive price. The main negative is the speed at which you need to move, there is not time for lengthy debate you need to make a firm informed decision and move quickly to get your property finance in place. Not all properties that are sold at auction require work but the vast majority will at least require some attention. You will need to find a good local builder and ask your estate agents advice on how best to maximize your profits from property development.
They may advise a simple refurbishment or they may advise that the type of property you are buying would benefit from a home extension to make the kitchen or living space more appealing. Whatever your plans for buying auction property the best advice is to go to a few property auctions before you think about buying a property, so you get a feel for how property auctions work.

Good news for affordable housing

Richard — Thu, 08 Jul 2010 19:34:07 +0000

The new government has found and pledged considerable funds to assist in the regeneration and development of affordable housing. This area of funding had recently been in doubt as the new government has been looking at large funding gaps between what had been promised and what it is now capable of delivering. There were real concerns that the funding for affordable housing just was not there to be spent. The government has pledged enough funds to cover existing legal obligations with further funding available for its top priority projects.

How do you get planning permission for new homes while planning is in Limbo?

Richard — Mon, 05 Jul 2010 07:32:55 +0000

Many in the world of planning and development are slightly concerned at what they see as a lack of clear direction as the planning laws are altered after the scrapping of regional plans. This has caused some councils to hold back decisions on landmark planning decisions until new policy is clear.
Some developers are left holding expensive sites and land for both residential and commercials property development. The lack of suitable consented sites and land will have an impact on the housing market recovery and may lead to land with consent changing hands at an artificial premium.

Making higher profits from buy to let?

Richard — Tue, 29 Jun 2010 09:47:25 +0000

Landlords and property investors are set to make higher profit margins as rents are rising and a shortage of suitable rental properties are coming to market.
The current increases in rents achieved are in complete contrast to the final quarter of last year as rents showed no increase back in 2009. Results from the Royal Institute of Charted Surveyors show their surveyors as optimistic about the future for rents. They reported the highest level of optimism for rising rents since the start of the survey in 1998. The increase in rents is driven by a direct decline in the number of properties available to let. With sound economic principles behind the increases in rental costs there appears little doubt that rents are and will continue to rise for the foreseeable future.
These statistics come at a time when many accidental landlords are choosing to leave the market as they have seen a recent rally in capital values. The demand for rental property also appears to be on the increase which coupled with less rental housing stock is a sure sign that rents will continue their upward course.
With the first signs of a freeze in the buy to let lending market starting to turn to a thaw and rents raising this is the best time for landlords for years! The banking and property finance market always follows a similar course. When things go bad the banks panic and stop lending, then they start to gradually lend to the “safest bets”, top earning domestic mortgages and low loan to value mortgages. With a marked increase in the number and type of buy to let mortgage products available, it bodes well for other sectors in the property sector. The next area that should receive positive news after the buy to let lending has recovered is the commercial property market. With time, better deals will make the commercial property market again a better proposition for property investors. Then that most interesting of all property sectors the world of speculative property development. This area of the property market has been brought to its knee’s by the worst lending drought for decades. This sector has been out of vogue with lenders and partly blamed for the financial crisis. It is true that speculative property development did play its part in the financial crisis. You only need to look at the volume of available property for sale in Spain. The whole country is crippled by a huge over supply of new build properties, with many experts in the European property market expecting fire sales and some real bargains as lending and reality bite.

How to renovate a house for profit

Richard — Sun, 20 Jun 2010 08:28:36 +0000

This is one of the most popular ways to enter the exciting world of property development, and lets you understand how the processes of project management and the purchase and sales process work.
One of the most important things to do is good research, find out what your target market want from your type of property in your area of operation. Then make sure you “do the maths”, make sure you have a tight grip on renovation costs and resale values. These are the two most classic mistakes that novice property developers make, they underestimate the renovation costs or overestimate the resale figures.
So make sure you get the best local agents on side and find a good builder, many novice property developers choice to use subcontractors and manage the various trades themselves. I would suggest for your first development you retain a main or principle contractor. This way you know who to go to if there are any bits not quite complete. I have seen many developments where all the trades claim that it was not in their quotation or it is another trade’s responsibility.
The other important thing is make sure you do not over stretch your budget or skills, either of these can have devastating consequences. If the job “cost us double our budget”, or “we did not realise it had structural problems and dry rot”, your dream of making easy money could cost you money. If the funds dry up half way through a project, you face the prospect of having a “job on stop”. Not only do you face the issues of refinancing but also your builders may jump ship and be off to the next job. So make sure you hedge your bets and start with a relatively straight forward project. Once you have some cash reserves and more experience then you can tackle a more complex project. One thing to remember is there may be more profit in a few simple developments than getting bogged down on a complex project.

10% increase in mortgage lending

Richard — Fri, 18 Jun 2010 18:16:04 +0000

The total lending volumes have increased by 10% in comparison with the amount of money lent for mortgages in the same period last year.
So as we look forward with some trepidation to the emergency budget it is nice to have some positive news. There are concerns that the austerity drive will not only affect the wider economic back drop but it may knock consumer confidence, which is always a big driver in the property market. There are few that feel like splashing out on a new house or investment property if they have concerns about their income or net worth. The property sector also has more than a passing interest in banking regulation, with the Bank of England expected to have great responsibility for the overall stability of the banking system. This will lead to more systems and guidelines for responsible lending on property and speculative property development funding.

Are you looking for affordable housing?

Richard — Thu, 17 Jun 2010 19:41:02 +0000

If you are, it may be worth making it one of your number one priority, because many in the property sector believe that the number of new affordable homes being built will plummet as house building and property development falters.
The government has quietly scrapped the regional house building targets and this is at a time when new house building has dropped to the lowest level in peace time since 1924!
So as the construction industry struggles on and property development funding continues to be sporadic how do we build new homes without planning or money?
The property industry needs clear focus and direction and the government needs to assist the most successful in the industry to find solutions to our current challenges.

Investors could be set to make cash quickly form distressed property sales

Richard — Tue, 08 Jun 2010 11:47:52 +0000

Top property professionals being surveyed who are expecting to see an increase in distressed property sales has increased. The number expecting to see more distressed property sales has increased form 14 percent to 42 percent.
Interestingly there are institutional investors looking to benefit from the large property loan books that are currently burdening many banks accounts. The increase in activity amongst investment funds that specialise in purchasing, re-financing and managing property investment portfolios has also increased as they look to take advantage of the increase in distressed property sales. There have been some positive news from the property market over the previous twelve months but recent government announcements have cause struggling property owners to give up while the going is still good. They are not prepared to risk a further drop in this ever popular asset class, so are they making the right decisions? What will happen to the property sector over the next twelve months? Leave your comments?

Private equity investors backing new residential development sites

Richard — Fri, 04 Jun 2010 16:29:06 +0000

Experienced members of senior management from national house builders are being poached and backed by private equity investors in new ventures into residential property development. One such company has received one hundred million pounds of private funding to focus on new build residential developments in and around the capital.
These new ventures are thought to be focusing on London and mainly the top end market, and they must be confident that prices in this sector will remain relatively stable. Those who follow the UK property market closely look at a few key performance indicators of the markets future. They often follow prices achieved at auction, actual trading of house price futures and the top end of the London market. What happens to the top end of the London property market can often ripple through the rest of the UK housing market.