The last few working days before the festive beak have heard strong words from the parliamentary committee tasked with reviewing the new Planning policy framework. Their main gripe was the presumption of approval for developments that did not compromise certain economic and social criteria. The wording of the new document came under close scrutiny and they asked for removal of ‘significantly and demonstrably’ when used to justify the denial of planning permission. The use of this phrase would make it very challenging in some instances to deny planning permission. So why is there so much fuss over the minor detail of this document? The reason is that this will have a dramatic effect on the number of new build developments that take place. This in turn will affect the number of construction jobs and new homes coming to market. The number of new homes that received planning permission this year is down 10% on the previous year which also produced very low levels of new build. We need to look very carefully at these figures they are currently running at around half of the demand levels. Each passing year we are storing up challenges for housing in the UK for decades to come.
Nearly a quarter of all mortgage applications are buy to let
October 19, 2011
Data released from Paragon the buy to let specialists reported that nearly a quarter of all mortgages passed through intermediaries where for buy to let property investment. This figure has jumped by over 4 percent in the last quarter and is the highest figure since they started recording this data in 2007. This is not surprising with increases in private rents as it shows a clear demand for rented properties. The government statistics show that the vast majority of the private rented sector is held by just over ten percent of landlords. The good news for mortgage brokers is that professional landlords represent a good opportunity for repeat business.
Mortgaged to the hilt?
August 15, 2011
It seems not, research from the council of mortgage lending shows that the average household owes less than 60 percent of their homes value. Interestingly the number of homes in negative equity has hardly changed since 2009 levels even though prices have dropped. With talk in some of the tabloid press of interest rates being cut many think that the residential property market may have bottomed? Who will be the brave commentator who will call the turn in the market? If they are brave and get it right they will be heralded as a well researched expert. If they get it wrong they will just look like a member of the UK or USA economic growth forecast team.
Commercial property set to thrive in the North and Midlands?
June 27, 2011
With a recent announcement that the BBC is set to move operations form their London base to Salford it shows a renewed interest in the North and midlands. With many larger and medium sized companies looking at their various costs their premises are always an option for cost savings. The lease costs and employment cost are far more cost effective in the north and midlands compared with London prices. Interestingly the retail market in Manchester has risen by just short of three percent in the last twelve months. It makes sense for investors as well as business tenants, as the midlands and north offer far better rental yields.
Thinking of a new build property development, have you got everything covered?
January 29, 2011
One of the main concerns for all developers experienced or novice is cost controls, building projects are notorious for going over budget and schedule. So making sure you have the right management team on board is essential. Cost control starts with the initial inception and needs careful planning right through the design and build phases of your project. For large projects it is a worthwhile investment getting some contractual advice to make sure you as the client are protected against the common issues affecting JCT?s, building tenders and Schedules of works. Your accountant and bank may be interested in Investment appraisals, development appraisals, Project monitoring for funders, valuations of works, grant applications, project cash flow forecasting, and VAT issues.
Before your project starts you will need to make sure you have estimated your project budget, looked at your procurement procedures and prepared a tender document. Then finally when the construction phase starts carefully monitor costs and client variations.
If you have the right project management team on board and have all the above in hand, you will be able to complete your property development project without any unpleasant surprises.
UK Financial Directors are optimistic for UK property market in 2011
January 8, 2011
After a year of restrained spending many Financial directors have rebuild their battered balance sheets and are looking to invest and expand their business operations in 2011. Many sight the saying if a businesses is not growing it?s dying. Those companies that are cash rich are interested in taking advantage of buying out their competitors and securing the best lease deals.
Merry Christmas
December 23, 2010
We wish all our customers, past, present and future a wonderful Christmas. Best regards from all the team at Building Solutions (Midlands) Ltd
Is now the best time to buy commercial property for medium term capital growth?
December 2, 2010
Many in the world of commercial property are aware that the sector faces years of small if any increases in capital values and rental income. Professionals in the commercial property sector are aware that this is not really a negative, as the sector will benefit in the medium and long term from a period of market correction. With the heady years of 2006/2007 now just a warm memory it is hard to believe fund managers and other commercial property investors were ?snapping up bargains? with yields below 5%. Those who used property to make a quick buck are long gone and the property market is back in the hands of more serious and professional property investors who focus on medium term capital growth.
Commercial property development sites continue to change hands for big money
October 16, 2010
Rumors in the industry of a site in south Manchester changing hands for around 15million give further weight to talk of a quiet recovery in the world of commercial property development. The seasoned professionals that have lived through previous low points in the property cycle are taking advantage of great pickings for cash rich property buyers. The clever money is quietly buying and assembling commercial sites and circumventing funding shortages by guaranteeing to development funders that their sites and developments have pre-arranged outs. This means they have leases agreed for occupants to take possession immediately as property construction is completed. The sites are either re-financed against the pre-agreed rental income or off loaded to private or institutional investors on long primary leases.
Cash is king for property developers
July 22, 2010
With large UK developers looking at rights issues and other more imaginative ways of raising finance it is a sure sign that there are some fabulous opportunities out there for speculative property developers with ?cash on the hip?.
Many of the banks and lenders who have played a role in development funding previously are still simple too exposed to commercial property loans. So to mitigate their risks they are not prepared to lend against development sites and commercial properties. So as the old saying goes ?money goes to money?, developers make the cash when they sell but they make the really profits by picking up sites for a fraction of their value. Property Networking
