Advice For Your First Property Development in London

27th September 2021

In terms of options for savings, investments and beating inflation, property investment is often considered. In terms of fundamentals, housing is a necessity and the current housing shortage doesn’t seem to be decreasing that quickly. Private investors can make a difference in this situation and help create quality homes, with good amenities that people want to live in. Before diving in, it is important to think about the support network you’ll need and questions around location, budget and exit strategy.

How you will be financing your project and a rough budget is the first thing to decide on.

  • Will you be using loans/ mortgages to finance the purchase?
  • How will you pay for any construction work required, savings, loans or a JV?
  • Does your budget allow for flexibility; contingency spending and adjusting the level of finish?

The budget will dictate the location of your development to a certain extent. It can be difficult to find ‘entry-level’ projects in London but keep an eye on auction websites like Allsop and Barnard Marcus, there are often greenfield plots or garage sites with reasonable starting bids. It’s important to think about what you plan to do with the property once it’s complete before you’ve begun works. What’s more, you need to have alternative plans in place in case the market moves in a direction that is no longer favourable to your original plans

Concerning exit strategies you need to be asking yourself,

  • Will you carry out the works and put the property back on the open market?
  • Would the scheme potentially work if you built and sold it in stages
  • Will it be offered for market rent? Could some of the units be rented, and others bought
  • Will you do any works at all, perhaps obtaining planning permission would realise a worthwhile profit.

While it is possible to go solo and figure things out as you go along, unless you are prepared to learn the detail of each discipline involved in, sourcing, negotiating, buying and redeveloping a house or building for sale, it makes sense to have a team around you who are seasoned professional and understand the demands of the market and your vision for the development – both in terms of social and economic value. A streamlined advisory team could include an estate agent based in the area they hope to target; a builder or contractor with a good network of reputable tradespeople and a good understanding of current build costs and an architect who will be able to advise you on how to translate your vision into an asset that maximises potential value, is attractive to the market and satisfies local planning regulations.

As the capital city, London has a lot of positive points in terms of location is usually one of the mainly considered options. Depending on the exit strategy you are considering it would make sense also in pastures rental yield has dropped considerably resale prices remain buoyant. At the medium-upper price range, house prices are usually the last to be affected by market interactions and the first to bounce back after recessions.

Assuming you decided upon an appropriate exit strategy and location, it is important to then consider what strategies you will utilise to market the property. Will you depend on agents to assist to rent or sell the property or will you attempt to do it yourself. It is usually recommended to set aside a figure of around 2% of the total construction/ renovation costs to market the property. This can seem high, but if your works were completed using debt, every month the property is sitting on your hands will cost you dearly.

If, in the worst-case scenario the market changes – you may need to change tack quickly. You should already have a range of alternative plans at hand for these situations. Will you need to rent the property out for some time, will you need to subdivide the development for an easier sale or target a different sector of the market? Again, this is where having a really good team around you can be vital. At times like this architects can be vital to give you a neutral, unbiased view of your plans.

Whatever you are planning to do, remember that planning, critical thinking and adaptability are going to be key to avoiding the common pitfalls of new property developers. The team that you surround yourself with will need to have a proven track record of efficiently producing effective work, thinking flexibly and communicating well. Always keep in mind that project failure is usually a result of general ambiguity and a lack of clarity and, so make sure you have at least a vague understanding of your desired outcome and find a team who can flesh that out and push towards it until completion.

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jemsmith1
jemsmith1
10:44 23 Dec 20
We have used Detailed Planning a couple of times now for planning issues related to our nursery business and they have... always been efficient and communicative and got the result we needed.read more
Francesca Malone
Francesca Malone
19:02 28 Oct 20
We have used Detailed Planning to help design and obtain planning for our single story extension converting our one... bedroom flat to a two bed. We have found them to be extremely helpful, communicating the process and how things work throughout. We were particularly happy with their ability to negotiate our extension depth with the planning office, resulting in 3.5 metres instead of the permitted 3m, which was crucial for our space to work. We look forward to working with them for the rest of the project.read more
Sharon Marsh
Sharon Marsh
15:51 21 Oct 20
We used Detailed planning for a loft conversion and side extension. Very helpful guidance with respect to what would be... allowed by the Planning department. Very efficient service. Would highly recommendread more
Christian Constantinides
Christian Constantinides
19:07 10 Oct 20
I used Detailed Planning for a new build home in the London Borough of Enfield. They managed initial feasibility and... concept design, the planning application process, building regulation drawings and support throughout the build. All in all the entire service was fantastic and I would certainly use Detailed Planning for future projects.read more
Claire M
Claire M
12:52 15 Jun 20
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Komal Lulle
08:35 28 May 20
Excellent team and superb service. They are best a there job and they provide guidance, support, work and plan... according to your requirement. And do not hesitate in making changes until you are satisfied. Truly recommend themread more
Emma cheevers
Emma cheevers
15:00 20 May 20
Paul and his team were absolutely excellent to work with. I couldn't recommend them more. So professional, quick and... always ready with advice. Really enjoyed the experienceread more
Mel D
Mel D
21:03 13 May 20
Paul & Emily are fantastic, they have done everything from start to finish for our planning permission and technical... drawings and the quality of their work is very high (I guess it is in the name - detailed!) They have been patient with all our design changes, provided lots of advice, walked us through the process of who to engage with, when etc. and were always responsive and helpful when we have questions both via email and phone. This is our first major project and we are doing a loft conversion and remodelling the entire house so to have this support has been invaluable and well worth the money. We actually found them on trust a trader and obtained a few other quotes, DP was the most reasonable price wise, had the right qualifications, good reviews and a big plus was their well evidenced portfolio of work & experience in the area. It was a no brainier and they really have delivered beyond our expectations, most things have also been done via emails and zoom calls so the flexibility was there which really worked for us, would recommend them to anyone!read more
Gopinath V
Gopinath V
16:14 24 Jan 20
Detailed Planning were recommended to me by a friend. Right from their initial visit and all the way through to the... finished plans, they were very good and we could not have asked for better service. Paul and Emily were always very good in their work they answered every query we had and solved every issue that we encountered during the planning They work extremely well with their recommended engineer, surveyor and building control company to deliver a very good package. Thank you Paul, Emily for your excellent work, We can't wait for our extension to be completed.read more
Ornela Haxhia
Ornela Haxhia
11:48 09 Jan 20
We found Paul and Emily very professional, insightful and helpful during the planning approval stages of a rear... extension to our property. They provided us with regular timely updates. We highly recommend. We have already passed on their details to friends who are looking to make changes to their property in the summar.read more
Nicky Freedman
Nicky Freedman
19:51 23 Dec 19
Nothing a problem for the team at Detailed Planning, helpful, always at the end of phone, attentive and reliable and a... fast efficient service. Would definitely recommend and use again.read more
Stephanie Coward
Stephanie Coward
11:09 18 Dec 19
The service provided by Detailed Planning was exceptional, with fast response times and excellent communication... throughout the project. We would definitely recommend Detailed Planning and look forward to working with Paul and the team again in the future.read more
Oliver Jenkinson
Oliver Jenkinson
19:30 21 Nov 19
Pro active and efficient and got the job done.
Vinay Rughani
Vinay Rughani
18:55 20 Jun 19
Detailed Planning were recommended to me by a friend. We found their prices very reasonable so instructed them to draw... up plans for our extension. Right from their initial visit and all the way through to the finished plans we could not have asked for better service. Paul and Emily were always very easy to get hold of, which I'm told is not the case for all architects. They answered every query we had and solved every issue that we encountered during the planning and party wall agreements with minimal fuss and in good time. They even sorted our build over agreement for our manhole to be moved. They work extremely well with their recommended engineer, surveyor and building control company to deliver a very good package. Thank you Paul, Emily and everyone at Detailed Planning. We can't wait for our extension to be completed.read more
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