Category Archives: Property

News, Property

5 tips for financing a property development project

By Ritchie Clapson CEng MIStructE, propertyCEO

While it is possible for a small-scale developer to finance an entire property project using other people’s money exclusively, it’s certainly not the easiest route. Most commercial lenders will want you to have some skin in the game. But how much skin?

A commercial lender will typically lend 100% of the development costs and up to 70% of the asset purchase price, which leaves you to find the remaining 30%. But you can reduce your “skin” further by involving private investors: individuals who have savings or capital to invest and who are looking for a reasonable return. Most private investors can expect to receive an 8% to 10% annual return in property development. The same money will earn them less than 1% in the bank.

Don’t forget that money lending is a heavily regulated business. Be sure to check out the FCA’s rules.

Here are five tips to make finding the money for your next property development project a lot easier.

  1. Use a commercial broker

Commercial lenders are specialists, so your typical high street bank won’t usually be on your shopping list for development funding. Some lenders have a direct-to-developer model, but many rely on a network of commercial finance brokers to bring them business. And here lies yet more good news – these commercial brokers are on your side. Their job is to find a lender who can fund your project. Transparency is critical, and your broker will need to know all about the deal and your professional team, as well as you and your development business. If you have a few financial skeletons in your cupboard, tell your broker. It invariably comes out in the wash anyway, and you risk alienating everyone involved if you ‘forget’ to mention your unmentionables.

  1. Build a brand

You need to have a brand behind you. A name, a logo, a website, and a business card. People need to feel that they’re doing business with a brand and not just an individual, no matter how firm your handshake or how convincing your smile. So make sure you set these things up right at the start so that they can silently go to work for you in the background. The number of private investors who didn’t try to check out the developer’s website before they agreed to lend them money is probably as near to zero as makes no difference.

  1. Learn how to analyse your deals robustly

When you put your deal forward for consideration by a commercial lender, it’s fair to say they’ll kick it pretty hard to see what falls off. Do your costs look reasonable? Does the professional team have enough experience? Are your anticipated profit numbers prudent or pure pie in the sky? And what happens if the market changes or the contractor goes bust; do you have a second exit strategy? This is, of course, excellent news; it means that if they agree to lend you the money, then you can be reasonably sure it’s a solid deal.

  1. Cast your net far and wide

Commercial lenders are traditionally Route One when it comes to finding finance, but they’re not the only game in town. One of the more recent kids-on-the-block is peer-to-peer lending, aka ‘crowdfunding.’ The premise is simple. The peer-to-peer lender secures funds from lots of different private investors on the one hand, and then they arrange for the money to be lent to developers on the other, taking a fee in the process. Like the commercial lenders, they’re adept at critiquing deals, which means their lenders can have confidence that only good developers with decent deals will be put forward. But they can also offer advantages to developers over and above the traditional lending route, so it’s well worth doing your research. You’ll also find many investment clubs and groups out there as well as a range of high-net-worth ‘angel investors.’

  1. The deal is king

There is a lot more money out there that needs investing than there are property deals that return 8-10%. So don’t forget that it’s the developer that has the whip hand when it comes to finding investors, and not the other way around.

ABOUT THE AUTHOR                                                                

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

https://propertyceo.co.uk/

Charity & CSR, News, Property

Berkshire developer makes grand gesture to charity helping children with life-limiting conditions

David Wilson Homes Southern has donated £1,000 to Alexander Devine Children’s Hospice Service (Alexander Devine), which provides specialist care and lifeline support to children with life-limiting and life-threatening conditions, and their families.

Working across Berkshire and into surrounding counties, Alexander Devine currently supports over 135 children and their families, and are committed to continuing to grow their regional service and reach out to every child that needs them.

In reaching out to its local communities, David Wilson Homes has made the £1,000 donation as part of its Community Fund scheme to help the children’s hospice service continue to meet the needs of the children and families that rely upon its service.

With minimal government funding, the homebuilder’s financial gesture will help Alexander Devine to meet the £1.8 million cost of running its vital children’s hospice service each year.

Jenni Green, Trusts and Foundations Fundraiser at Alexander Devine, said: “We’re thrilled to have received this donation and would like to say a huge thank you to David Wilson Homes for choosing to support us through its Community Fund scheme.

“We are a local charity that is nearly entirely reliant on fundraising and donations to run our vital children’s hospice service. This donation will make a such a difference to those children and families that rely on our services.

“We’re caring for more children with complex medical needs than ever before and we can only continue doing so with the support of incredible organisations like David Wilson Homes.

“This generous donation could help fund nearly 23 hours of specialist nursing care for a child with a life-limiting or life-threatening condition. This precious time will allow parents much-needed respite and give a child the opportunity to experience fun, joy and adventures at our hospice or in their own home.

“The Community Fund scheme is a wonderful and generous way for local charities like ours to benefit from much-needed funding. We can’t thank David Wilson enough for its kindness.”

Alexander Devine Children’s Hospice Service has a holistic approach that is bespoke for each child and family in order to provide the best possible care and support that they need.

Whether it is at the children’s hospice in Maidenhead or out in the community in a family’s home, hospital or school, the charity offers respite care, specialist play, symptom management, family support, end-of-life care and bereavement support.

Campbell Gregg, Managing Director at David Wilson Homes Southern, said: “Alexander Devine Children’s Hospice Service carries out admirable work in Berkshire and beyond. We’re proud that we can support the charity in continuing to make a difference to so many lives in the local community.

“The role of our Community Fund scheme is to help the wonderful charities and organisations in the areas in which we build and we’re thrilled we’ve been able to support Alexander Devine with our donation.”

The charity was founded by John and Fiona Devine in memory of their son, Alexander, who sadly passed away from a rare brain tumour in 2006. Their personal experience led them to realise a vital need for a local children’s hospice service with a hospice facility in Berkshire.

More information about Alexander Devine Children’s Hospice Service is available at www.alexanderdevine.org.

To find out more about David Wilson Homes, visit www.dwh.co.uk.

News, Property, Property News

Insight: Collaboration Is Key For Rent Collection 

Written by Matthew Peake, partner and head of Strategic Asset Management at Cluttons

Covid has brought many challenges to the fore, with one of the topics receiving increased profile is that of rent arrears. A mountain of some £7bn of uncollected rent has been cited (Remit Consulting, November 2021) by landlords of commercial properties. Much of this has been put down to landlords and tenants wrangling over the arrears that were racked up during the pandemic, with the British Property Federation estimating 20% of cases are yet to reach an agreement.

As an advisor of landlords and tenants, there are examples on either side that have not represented either party well. Many of us will remember the stories about Burger King and other popular brands that were publicly lambasted for not paying rent to their landlords during Covid.

Landlords have not gone without ‘greedy’ slurs and Government measures have largely been to protect tenants rather than landlords. The new Code of Practice and draft Commercial Rent (Coronavirus) Bill, while not law yet, aims to intervene in situations where landlords and tenants have not agreed over how to share the arrears brought about because businesses were forced to close or operate under restrictions during the pandemic.

This could be a very important piece of legislation – it backdates to March 2020 and, if the BPF is correct in its estimate that 20% of cases remain unresolved, it could have a great impact on the industry as rents are ringfenced until agreement is reached.

We are seeing some big names come out with their collection figures that are back to pre-Covid levels – the likes of British Land, New River Retail REIT, CapReg and Cadogan all highlighting a high rate of collection, with the industry average at 76% as of December 2021, according to ReLeased and Property Week. This is welcome news but I would hasten a guess that many of these involved landlords who sat down with their tenants early on in the pandemic to work out a way forward.

Cadogan, for example, was the first major name to come out in favour of turnover-based rents and restructured payment terms. Having worked with the company, we know that the first thing they did when the pandemic struck was speak to each tenant individually to understand their circumstances – a move that ultimately led to their creation of the Business Community Fund which underpinned the recovery of many Kensington & Chelsea businesses.

As advisors, we have the responsibility to represent our landlords’ brand and values in any negotiation. We have seen the best of both sides in our dealings since the outset of the pandemic. We have also seen tenants who have performed excellently during the pandemic cite Covid as a reason not to pay rent on some of its best performing units.

For the most part, the landlords who have done well have been the ones to actively collaborate – to get to know their tenants’ businesses, their challenges, and to work out a recovery plan together. That’s what we would always advise. After all, in property, collaboration and transparency is key to commerciality.

So yes, the new bill might be a gamechanger, but let’s hope it doesn’t have to be in the majority of landlord and tenant relationships.

 

News, North of England, Property

Lincolnshire homebuilder unveils new show homes in Bourne

Homebuyers in Lincolnshire can now secure an appointment to view the newly unveiled show homes at Barratt Homes at Bourne following a recent launch.

The brand new three bedroom Maidstone and four bedroom Alderney and Kingsville style homes have been thoughtfully designed to meet the demands of modern living at the growing community on Len Pick Way.

Showcasing the latest trends in interior design, the new show homes give house hunters the opportunity to gain inspiration for decorating their own properties after moving in.

Jan Ruston, Sales Director at Barratt Homes North Midlands, said: “We are thrilled to have the chance to welcome prospective buyers to view our new show homes in Bourne.

“The Maidstone, Alderney and Kingsville properties each offer something different for first time buyers, growing families and downsizers alike.

“We’d encourage anyone keen to learn more about the properties available to register their interest to book a tour around our new homes with a Sales Adviser, or make use of the virtual tour function online.”

Barratt Homes at Bourne provides homeowners with great access to a thriving market town, with a mixture of shops, bars and restaurants in tow.

Bourne’s prime Lincolnshire location offers excellent road links to the commuter hubs of Peterborough and Stamford, with the A15 and A1 close by.

For homeowners with little ones in mind, there are Ofsted-rated “Outstanding” schooling options in close proximity of the development, with two play parks on site to keep youngsters entertained.

There are over nine acres of green open spaces and nearly two kilometres of cycle paths at the development for biking enthusiasts and general lovers of the great outdoors, with a nature area also in place.

A mix of three and four bedroom properties are available at Barratt Homes at Bourne, with prices starting from £237,995.

To register an interest in visiting Barratt Homes at Bourne for a show home viewing, call the Barratt Homes sales team on 033 3355 8472 or visit www.barratthomes.co.uk.

Construction, News, Property

The best strategy for first-time developers

Written by Ritchie Clapson CEng MIStructE, propertyCEO

If property is an area that interests your entrepreneurial side, you could go for a quick flip, but that isn’t where the real profits lie. That doesn’t mean you jump in and build an entire housing estate. Something between the two will be a good fit, but wherever you decide to place your efforts, consider profit and risk.

 

Profit

Assuming you are looking for a 20% return on each project’s selling price, if you want to make £100k, you will need a project where the units sell for £500k. Similarly, if you’re going to make a million, your project will need to have a sales value (a.k.a. gross development value or GDV) of £5m. Most people we train would be looking to create a profit of between £100k and £500k from each project, which places them firmly in the small-scale development category.

 

Risk

You want to be able to avoid as much risk as possible for a whole host of reasons, not least your ability to sleep soundly at night. Similarly, you will want to make sure you are able to get your projects completed quickly.

 

How do you achieve this?

My first recommendation is to stick to small-scale developments rather than thinking that doing a project ten times the size would be a good idea. Yes, the bigger project will involve less than ten times the work on your part, but it can easily involve ten times the stress and ten times the risk.

My second recommendation would be to avoid having to apply for full planning permission. You will be relieved to know this does not mean building a block of flats and hoping that no one at the council notices. Instead, it means using permitted development rights (PDRs) to change the use of an existing building without the need to apply for full planning permission.

PDRs are rights granted by the government that allow us, among other things, to convert commercial buildings to residential use without the need for full planning permission. Since 1st August 2021, it has been possible to convert a much wider range of properties into residential without the need to apply for full planning permission. To give you some idea, you can now convert shops, cafes, restaurants, banks, financial and professional services buildings, gyms, light industrial buildings, offices, doctors’ surgeries, medical or health services buildings, creches, day nurseries, and indoor sports centres. That gives us a vast number of small-scale projects to aim for since many of these buildings will be way too small for larger developers to bother with.

 

Where to look

There are two basic rules to remember when it comes to understanding how to win good property deals:

  1. Avoid as much competition as possible by looking where other developers aren’t.
  2. Know how to make more profit from a property than the other people looking at it.

The sweet spot for my money is light industrial. Buildings that house industrial processes and are located in a residential area have an obvious benefit as you don’t want to convert properties that are in the middle of nowhere or on an industrial estate. Many of these properties are little more than four walls and a roof, the idea being to create a large open-plan space that can house whatever business is being run there: printing works, MOT centres, workshops, car repairers, etc.

Most light industrial buildings will be built on a thick concrete slab. This slab will typically extend across the entire floor plate and should be more than sufficient to support a residential building. This means that wherever you want to build a wall, you already have a nice firm base in place.

And most light industrial buildings are open plan, unlike office buildings which tend to have supporting pillars and stairwells dotted around. This makes for far fewer constraints in terms of the layout of your flats. It is relatively straightforward to upgrade the walls, floor, and roof to residential specification, plus your contractor will love you since they can do most of the work inside, under cover (rain isn’t much fun to work in and can even stop play).

The ability to convert to residential using permitted development rights and a lack of competition make these buildings an attractive proposition, plus the small-scale nature of these projects make them ideal for the first-time developer.

 

ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

https://propertyceo.co.uk/

 

Education, Engagement, Property, Property Buyer News

Grand designs by talented art students light up new year property campaign

GRAND designs by talented art students hold the keys to a long-standing partnership with one of the country’s top property agents.

Learners on the Foundation Studies in Art and Design course at Grwp Llandrillo Menai have been working alongside Williams Estates to develop a series of images for their Home is Where the Heart Is campaign.

The cohort from the college’s Rhos-on-Sea site created bespoke posters for an innovative light-up window display that will capture the attention of customers and passers-by at their offices in Holywell, Denbigh, Mold, Rhyl, Ruthin, Prestatyn and Rhuddlan.

It comes as Director Jason Williams and the team again were named Best Lettings Agency in Denbighshire at The British Property Awards for 2021/22, adding to the impressive array of industry customer service awards they won this year.

Jason said: “We’ve had an amazing year and it’s been topped off by the brilliant work of the students at Llandrillo.

“We are always keen to try and support the college and the next generation of artists and designers with real-life, real-time projects that will enhance our marketing and profile while giving them vital experience.

“The end result is a fabulous and eye-catching digital poster using different concepts which will definitely turn heads – we love it and thank them for their amazing efforts.”

This is the sixth consecutive year that Williams Estates has given the Art and Design department a creative brief.

“And every year the absolutely blow us away with what they come up with,” said Jason.

“This Christmas is no different, they’ve outdone themselves once again.”

Lecturer Dewi Owen Hughes added: “I fully support such links with industry as I believe realistic creative work projects greatly enhance the experience and future employability of our Art and Design students.

“Our learners gain so much added-value by working on this brief and they can’t wait to see their creative work being printed and used by Williams Estates in a state-of-the-art LED light-pocket window display.”

Reflecting on their latest awards victory, which came just weeks after they won six titles at the ESTAS – including their ninth Gold for Best Sales Agent in Wales – Jason said: “That is testament to our staff, who – despite the challenges of the pandemic – have gone above and beyond to support our customers and provide outstanding service.

“For that to be recognised with success in two such high-profile industry award ceremonies is a major honour for us.”

“Visit www.williamsestates.com and follow @williamsestates for more news and information from Williams Estates.

For more information on Creative Arts courses at Coleg Llandrillo, call 01492 542 338 or visit www.gllm.ac.uk.

 

 

For more property news, visit propertynewsdesk.co.uk

News, News from Wales, Property

First Look At The Entrance To Cardiff’s £2bn Garden City For The 21st Century

The first details have been released of the green gateway to Plasdŵr, Cardiff’s ‘garden city for the 21st century’.

The Gateway Linear Park will be the main entrance to Wales’ largest development, which will eventually deliver up to 7,000 homes over the next 20+ years.

Situated near Llantrisant Road in Plasdŵr’s Groeswen neighbourhood, these wide tree-lined avenues and greenery will link residents and its surrounding communities to some of Plasdŵr’s key features. These include the main commercial centre, Canol Plasdŵr / Plasdŵr Centre, residential areas, and its first primary school.

With almost 40% of green space planned for the development, the Gateway Linear Park will be a destination for Plasdŵr residents and visitors to enjoy the great outdoors. Designated play trails and outdoor seating within the park and wooded areas will give residents and the local community a space to keep healthy and active.

Footpaths and cycleways will run through each end of the park, part of Plasdŵr’s carefully designed network of footpaths and cycle routes which prioritise active travel and public transport, linking residents to amenities safely and easily.

In line with Plasdŵr’s commitment to sustainability, the park will include a series of swales – planted drainage features which will be installed to support the reduction of pollutants entering the sewage network and will enhance and encourage biodiversity. Drainage ponds, trees, and wildflower meadows which feature throughout will also benefit local ecosystems, providing a safe network of habitats for local wildlife.

Public art will also feature throughout the Gateway Linear Park, with installations planned for both entrances of the park from Llantrisant Road. Plasdŵr will be working with local Welsh artists to commission pieces celebrating local heritage and the landscape of the area. Plasdŵr’s public art strategy will eventually see these themes repeated across the development through a variety of installations in key public spaces.

Wayne Rees, Project Director of Plasdŵr, said:

“We’re really pleased we’re finally able to announce specific details on Plasdŵr’s Gateway Linear Park. As with other aspects of Plasdŵr, our aim is to take inspiration from local heritage and landscape and the Gateway Linear Park gives an early indication of how the garden city will look and feel once its complete.

“The development of green infrastructure is a key element of our plan showing our wider commitment to creating a sustainable community. We’re also looking forward to partnering with local talent through commissioning pieces of art. This will make a significant contribution to the cultural well-being of the community as well as the physical landscape.”

Ground has already been broken with initial infrastructure and landscape works in place, but the park will continue to develop over the next few years. For more information on the wider development of Plasdŵr, head to www.plasdwr.co.uk.

Charity & CSR, Midlands News, News, Property

Foodbank receives support from city housebuilder

A city foodbank charity which fed 35,000 people last year has been given a funding boost by a local housebuilder.

Coventry Foodbank, which has the largest foodbank warehouse in the country and gave out 280 tons of food last year, has been given £500 by Bellway’s South Midlands division, which has its regional headquarters in the city.

The foodbank, which was set up 10 years ago, is based at the Halo Centre in Progress Way. It provides a box of three days’ worth of food supplies and toiletries to people who are given food vouchers by a range of agencies including the city council, the NHS and Citizens Advice.

Hugh McNeill, project manager at Coventry Foodbank, said: “We are funded by public donations which provide us with the financing to ensure we can carry on providing food at our 12 foodbank centres in the city.

“This very generous donation from Bellway will give us a much-welcome boost after a very hard time for everyone. The public have continued to support us incredibly well during the pandemic but things have been tough.

“In 2019, we fed 28,000 people and last year we fed 35,000 people. Of that number, approximately 14,000 will be children under the age of 16.

“In the first few weeks of the pandemic, with people being furloughed and laid off, we saw a 100 per cent increase in people accessing our foodbanks. That demand eased off but we have been busier than ever.

“We will use the £500 to support our commercial kitchen project. We are setting up a kitchen in the warehouse so that we can train people with catering skills.

“While we train the people they will be making ready meals or soup for use at the foodbank. The idea is to furnish them with skills that can be used to help them gain employment.

“We very much see this sort of training programme, which will also include any tutoring people may need to gain maths or English skills, as the future role of foodbanks.

“Our ethos is that this foodbank should be a hand-up not a hand-out and the money from Bellway will help us provide that.”

Elaine Brown, Head of Sales at Bellway South Midlands, said: “The pandemic lockdown must have put an incredible strain on charities such as the Coventry Foodbank for many reasons.

“This is a brilliant charity that is funded by public donations which allow it to carry on its work and can literally be life-saving. Their food boxes help put food on the tables of thousands and thousands of men, women and children in Coventry every year.

“We are always pleased to support local charities who do such good work to support people and families and there is no doubt that Coventry Foodbank is at the forefront of reaching out and providing immediate and much-needed assistance and support to the local community.”

For more information about the charity visit coventry.foodbank.org.uk.

Bellway’s South Midlands division is currently based at Oak House, Binley Business Park, having recently relocated to new larger premises in the city.

The housebuilder is also building new homes at developments in Warwickshire, Oxfordshire, Worcestershire and Northamptonshire.

For more information about any of the developments visit bellway.co.uk.

CAPTIONS –

  • Jeané Izautenbach (left) from the Halo Centre, Coventry with Jess Bray (right) of Bellway South Midlands
News, Property

Post pandemic priorities for house hunters

House hunters have five key priorities for their dream home post pandemic, according to trusted local estate agent Belvoir.

Many people have re-evaluated their lifestyle and found that key considerations now include having a bigger garden, being closer to family, having a shorter commute, being in a more rural location and having an office space at home.

Bobby Singh Braich, managing director of Belvoir branches in Kettering and Corby said: “The pandemic has forced many families to re-evaluate their lifestyle. There is a new hunger for more space and flexible working patterns.

“Many of us have changed our priorities and outlooks on what is important in life and that has become apparent when it comes to buyers and tenants searching for their dream home.

“Many former office goers are welcoming hybrid working and now require that perfect space for working from home, others are desperate to be closer to family after so much forced time apart and some families simply want a bigger garden for children to play.

“We have buyers and tenants crying out for that perfect abode that will make their lives more fulfilled, whether that be because they are closer to loved ones or because their commute is slashed in half.”

Official figures support the trends, with Zoopla’s latest house price index showing that houses are selling faster than flats as priorities change.

Four and five-bedroom houses nationwide are selling 33% faster than last year for the same reason.

As restrictions lifted over the summer and commuters went back to office working, searches for homes near commuter stations saw a dramatic uptick, according to national property search engine Rightmove, as workers looked for shorter commutes to meet their need for more time with the family.

The biggest increase in buyer searches is within an hour train commute of a major city. Corby and Kettering are no different, with both towns being less than an hour by train from London. And a utility and office space trump even a swimming pool in the key features stakes.

Bobby added: “There’s lots to consider when you’re looking for your dream home, even more so now in this modern world. Demand is high and stock is low but, despite this, we have a foray of local knowledge, which can really help you to find your perfect property.”