Build costs for Apartment Block?

by Readers Question

10:12 AM, 12th April 2021
About a month ago

Build costs for Apartment Block?

Make Text Bigger
Build costs for Apartment Block?

I have just re-mortgaged my property and have taken out a substantial amount for investment and would like some advice about building apartment blocks from the ground up, please.

I understand an architect is needed to draw detailed plans and the builder can give me a breakdown of all costs for labour and materials, but where do I find these builders?

Also, can anyone give me a rough idea of what the build costs are for a small block of 6 apartments/flats.

I understand some lenders may not lend for development to a first timer so if anyone can also point me to a lender that will be willing to lend to a first-time developer will be much appreciated.

Many thanks

Miz

Comments

Teimoor

11:50 AM, 12th April 2021
About a month ago

Hi Miz,
Your question has way too many variables to be able to give you an answer adequately.
But ill try and hopefully someone more knowledgeable will be able to assist you further.
Builders: Look at the council planning portal for buildings approved and being built similar to what you are planning. you will find the developer/ builder details usually in the associated documents. Or - google search for builders and vet them according to trade qualifications/ staff and insurance.
The build cost for a block of flats will vary depending on its location (london vs midlands) and specification. that will not be something so easy to define. One shortcut I can think of is if you can procure insurance valuation data on geographically close buildings of similar build (6 units etc) that will give you a ball park figure.
Insurance valuations are carried out every 3 years on blocks of flats and essentially attribute the cost of totally rebuilding the property should there be a catastrophic insurable event.

Otherwise procure the services of a RICS Chartered Quantity Surveyor. (usually needed for much bigger projects)
The cost of the build will reveal itself through your competitive tender process once you vet up to 3 builders to tender to. (always allow a generous margin for unforeseen costs).
You want to make sure the build costs per square metre doesnt exceed the selling costs per square metre in the local area. (no point building high spec flats if they wont sell for enough)
Anyway - just my 2 cents. Good luck!

Pamela Young

9:23 AM, 13th April 2021
About a month ago

Hi Miz
I have experience in doing exactly this and there are so many variables to consider. The one area you need to consider seriously is dealing with the local authority planners. Your lender will only release funds once you have approvals. My last development took 4 months to obtain planning permission. However, it then took over 2 years to obtain a Building Warrant (instead of 12 weeks) and once 8 flats were completed it took an extra 4 months waiting for Building Control to visit and issue a Completion Certificate. Without those, you can’t handover to purchasers.
Check the workload and timescales in your local area as it will impact you massively. Our 2 year project ended up taking nearly 5 and you need to be able to have your funds tied up during delays that you cannot control. Good Luck!


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER

5 Top UK Buy To Let Property Investment Hotspots