If you have property or land that you want to change the use on you may well go to an architect but often the best person for this job is a planning consultant. If it is a larger residential scheme or a commercial scheme it is probably best left to the expert, a planning consultant. They work more like a lawyer than an architect looking at case law and precedence rather than drawing plans and asking for approval. The first stage for a larger scheme is to start with a feasibility study these can be as little as a thousand pounds which considered against the capital value of the planning gain is relevantly small. The planning gain is the value of the site once planning permission is granted minus the value of the site preplanning. Some planning consultants will “work at risk”, this when they carry out various studies transport, need for the new proposed development and finding a suitable case to put forward for the development. They do not charge for the work they carry out instead they take a percentage of the planning gain. This is speculative on their part because if the development does not go ahead they do not get paid. It also acts as motivation to make sure they make the maximum effort to obtain the planning application.
House builder’s profits raise, can the construction industry cope?
April 16, 2012
It has taken three years of hard slog but many house builders are rejoicing as the ones that made it through, seeing many of their competitors and other property developers fail as the market slumped in 2008. They may be enjoying low land prices with potential development plots selling at discounted rates, but is the rest of the construction industry ready for a growth in house building? Many sub contractors and supplies have thrown in the towel and moved to other industries. With this in mind many house builders are still delaying starts as they slowly try to turn round and re develop supply chains and relationships with sub contractors and main contractors. They are rewarding investors with large dividends at a time when new house starts have dropped below the 100,000 level. With housing increasingly becoming a political issue will the government turn its attentions away from the financial sector and make an effort to revive house building and the construction industries?
Green builders call for brown field development sites as well as rural acceptance schemes
April 15, 2012
Green building experts look to brown field sites to create the most environmentally friendly developments. The use of existing brown field sites can save not only on infrastructure costs in both monetary and environmental terms but also allows the reuse of floor slabs as arrogate and the possibility of reclaiming other materials such as bricks and roof coverings. There is also increased interest in the use of rural exception schemes that allows locals to buy new rural developments at discounted rates. These schemes use covenants on the properties sold to allow them to be sold at a discount to market value to genuine local residents. They work through land owners being given some of the planning gain by selling agricultural land between its value as agricultural land and its value as a potential development plot. The savings in the land purchase price is then passed onto the local buyers in the form of a percentage discount from market value like those used in the right to buy scheme. These discounts are then passed onto other local residents when the property is sold on in the future. The rural acceptance scheme has three fold benefits, the land owner receives uplift in value, local people get access to affordable housing, and the local authority get new build development properties towards their development targets.
How to obtain planning permission for a site outside the village envelope?
April 9, 2012
Many planning consultants and town planners are waiting with great interest to see how the new planning guide lines will create planning precedence and effect planning applications outside the geographical plans for local authority strategic development. With the new planning guidelines presuming in favour of sustainable development what will this mean in real terms. The answer is that no one really knows, even house builders and developers have mixed opinions on whether it will make gaining planning permissions easier. For those holding potential development sites outside of the areas zoned for future development this law change could act as a lottery win. With rough figures for agricultural land fetching 4-8K per acre and development land with the correct permissions fetching 80-180K an acre you can see why site owners will invest heavily in planning consultants. Some planning consultants will chose to “work at risk”, and spilt the planning gains. This is good news for site owners as it means they can add value to their development sites by gaining planning permission without potentially incurring professional fees of tens of thousands of pounds at risk. The down side for the site owner is that they could potentially be giving away tens of thousands of pounds in planning gain profits.
Stuck with a development site you can’t finance?
April 7, 2012
Obtaining development finance has never been easy but in recent times it has proved impossible for many potential development site owners. The two biggest obstacles that effects site owner’s attempts to obtain speculative development finance is either an existing charge or finance on the site. Many speculative development finance providers simple will not consider lending on a site that is not unencumbered and already has outstanding finance charged against it. The other thing that banks and development funding providers have increasingly looked at to minimise their risk is development experience. First time or novice developers are finding it very challenging to obtain suitable development funding without the correct development team in place. Those that are able to overcome these obstacles are finding that their development sites no longer stack up because the percentages that the banks will lend are so restricted. The best way to overcome these issues is by making sure you have the correct members on the development team or carrying out a joint venture property development. Having an experienced quantity surveyor will not only give the banks confidence it will also help control build costs, assist with drawdown valuations and increase the opportunities for improved finance structures and cash flow management. Another way around these challenges is to use a private investor to clear off bridging or other finance charged on the site. This can be expensive with private investors expecting returns between twenty and fifty percent dependant on financial input and their risk levels. These considerations can often be weighed against the interest charges on existing finance or funds that are tied up in sites that the owner or development team are unable to build out.
House builder’s profits jump by 69% as margins and volumes improve
March 27, 2012
Britain’s fourth largest house builder has released figures for the first half of their year showing a jump in profits by an incredible 69% to just over forty million. The firm sold just short of two and half thousand homes an increase of 5.3 percent. The real uplift in profits came from the increase in the sales prices achieved, with an 8.5 percent increases in sales prices. House builder’s profits are continuing to increase as the fall in land prices after the property crash is now filtering through to plots sold. Many developers are increasingly showing an appetite for increasing their land banks. Improvements to the availability of development funding have also meant that margins are improved as borrowing costs are reduced.
Underpinning building foundations causes and repairs
March 18, 2012
There is an increase in the need for underpinning as there has been a period of unusually dry weather in recent times. There are several main causes of structural building defects that require underpinning as a remedial structural repair. The main causes are poor substrate the ground condition and type under the building, poor construction techniques the building has been badly built. Drains and trees are also often culprits of the need for underpinning. Defective drains cracked damaged drains with displaced joints can cause leaking underground often undetected for years which washes away the soil or substrate below the building. Trees can also affect footings when they grow larger or are removed causing land heave. The two most common foundation solutions are traditional underpinning and pile foundations. Traditional underpinning is when the existing footings are excavated usually in one meter linier sections and back filled with concrete. This is a gradual, slow and costly solution to defective building foundations as it is very labour intensive much of the work often being hand dig. It also requires a certain degree of experience, there has been instances in the past where inexperienced contractors have caused the collapse of buildings during this process. The second option is pile foundations these use various “rigs”, that dill and install the piles that are in turn used to support the existing or new super structure. Again this is not an easy or cheap option, the most important thing is to seek the correct professional advice. A good structural engineer will only cost a few hundred pounds but could potentially save you thousands of pounds on unnecessary structural building repairs.
Do I need a building contract for my home extension or building project?
March 17, 2012
Many home owners are concerned that they will get what they want and the quality they desire for their home extension or building project. The most important thing is that you do have a suitable level of documentation for the type of home extension or building project you are undertaking. With even a small home extension project it is important that you have enough detail in the building quotation or building tender document. It is no good starting a fifty thousand pound project with a single A4 page quote that says build as drawing. The more detail you can specify from the outset not only are you more lightly to get what you want at the price agreed. You will also find that your building contractors will be able to quote “like for like” the last thing you want is beautiful oak windows to then find your contractor had priced for MDF window boards. That is exactly the type of detail that can trip up a client or leave the building contractor faced with a difficult conversation. There is various documentation that is used in a building contract, a schedule of works, this outlines the various components and the installation or construction costs. The preliminaries, specification and workmanship document details the finest details of finishing and the relative specification for each trade and professional construction project section. The other document that is often used for a building contract is a JCT or joint contractual tribunal building contract of which there are various types from DB (design and build) through to more simple JCT contracts like Minor Works Building Contract. These documents when used correctly are more than sufficient to cover most domestic building works contracts.
Property developers and regeneration consultants look beyond the banks for mezzanine funding
March 13, 2012
With record low levels of bank lending, the banks appetite for lending on commercial property and speculative development projects is heavily reduced. Many property developers and surveyors are looking to alternative sources of development funding, the banks are holding around £280 billion of loan notes secured by commercial property. This as a proportion of their balance sheet is leaving them looking to avoid any additional lending to this sector in an attempt to spread their risk. It seems the best way around these challenges is to use a percentage of traditional primary bank lending with lending vehicles like tax incremental funding, regional growth funds, and enterprise zones topped up with private investment and mezzanine funding. There is some frustration in the property industry that tax incremental funding (T.I.F) is being drawn into other related amendments to business rate schemes. As with all finance and business success it is the most innovative schemes that will deliver the best results for the community, developers and ultimately private investors.
