I Am A Property Developer – Ask Me Anything!

Reply to the comment left by "Tony Atkins" at "10/04/2015 - 00:00":

Hi Tony,

The one i'm looking at is terraced so would be closer than a metre however I decided to give it a miss due to the darkness, I am sure I can find something else without these issues.

Thanks for the extra info, really appreciate this.

Hi Tony,

I have just seen a property today that I want to purchase but it is a reposession. It is a 3 bed teraced Victorian in need of some modernisation and has been empty for about 6 months. Now the problem is this, the agent has told me the next door house has had a sewage block for some time which has flooded the garden area which is a smal courtyard style garden and flooded over into our are of garden too and infact the house I am interested in has had its sewage blocked too because it seems they could share the same sewage pipes.

My concearn is this....if I have a owner next door who is not available for some reason or is not co operative with helping get this fixed then am I going to be without sewage facilities on this property? I knocked on the door next door to see if anyone was home but no luck, the place does not look in great condition so just wondered if it may be empty.

I have never bought a repossesion so if you have any tips there that would be great. There are two agents handling this sale so it is not one agent involved.

I really like this property as the layout is perfect for me to create an extra room and maintain lots of natural light that one would expect.

Best wishes Peter

Peter - You need to do more footwork on the ground and find out from the other neighbours what is going on and see if they know the owner of the neighbouring property. Also ask the vendors of the repossession to confirm that they will fix the problem with the sewage before completion.

Your other option, if the neighbour can't be contacted and the vendors are cheeky and say the sewage is your problem, is to contact Environmental Health and/or the sewerage and drainage team at the local Council. They may pass you on to the local water company, who I think have a legal obligation, if all else fails, to clear the blockage themselves and seek reimbursement from the neighbour. Or it is the responsibility of the Council. We live in a supposedly developed and civilised country and the buck must stop somewhere if an individual citizen is neglecting their property and damaging their neighbours' health and well-being by failing to maintain something as basic as the sewers.

This is all common-sense stuff and not much to do with property development. May I ask that in future you do your own research first and/or post such queries to the general Property118 board?

Reply to the comment left by "Tony Atkins" at "13/04/2015 - 10:58":

Hi Tony,

Thanks so much for the great advice as always, much appreciated.

Off course no problems with posting future unrelated posts on the general 118 section. Sorry about this, I didnt take the time to think this was off topic which of course it is to your thread.

All the best.

i am doing a commercial to residential conversion and it comes under the reduced vat rules, however, the building needs repairs to the outer brickwork and replacement of stone copings at the top of the front elevation, the hmrc information on reduced vat says, ..item..7.6...you can reduced rate any works of repair, maintenance, or improvement, carried out to the fabric of the building....my builder says no, this is standard rate vat, any thoughts, thanks.

Reply to the comment left by "ellis freeman" at "16/04/2015 - 11:33":

Ellis, you don't say what evidence your builder is citing to justify his argument. I would need to know more about why this specific aspect of the build is of concern to him. I assume he has accepted that certain aspects of the renovation are eligible for 5% VAT, so what documentation is he referring to in order to decide what is reduced-rate and what isn't?

He is presumably worried that he will charge you the wrong VAT and get himself into trouble and hours of unproductive admin work with HMRC. This is a fair concern, as the legislation and HMRC practice are really complex. May I suggest that if you are both scratching your heads and can't reach agreement, that you refer to an objective third-party? This would typically be your accountant or his - this kind of expert knowledge is exactly what you are paying them for. Or if you or the builder are NHBC- or Premier Guarantee-registered, or a member of the FMB, I think they have helplines for this sort of thing.

Another approach would be to post a query on a self-build website, where people are dealing with reduced-VAT claims and full-VAT reclaims all the time.

Finally you could try ringing HMRC, but frankly this can be an appalling waste of time as you sit in a queue, explain the situation, get cut off, ring again, are referred to someone else, who isn't in so you leave a message, and so on. Just use them as a last resort if your accountants are of no help.

Quote- I’d say the additional guarantees you ask about (NHBC, Premier Guarantee etc) are a red herring as if you’ve built properly, in practice there are almost no costs for the two years of liability. However there is the cost of the NHBC insurance, as well as S106 taxes, planning fees and so on, all of which you escape by doing refurbishments. So if you can find a clapped-out property at the right low price, that is certainly a sensible way to go instead of the capital-intensive and planning nightmare that is new-build.

I disagree with the above... having spent the last 20 years renovating, last year I dipped my toe in the water and did my first build- a 4 bed detached...I was astounded at how easy it was. As opposed to a renovation, where you can get nasty surprises throughout, the only place things can go wrong on a new-build is at foundation level...Everything else is as it is in the book...And with a renovation- you can still have planning fees & building regs to deal with etc...yes you have the NHBC cover which costs, but is a fantastic selling feature, and I found them good to deal with for advice throughout. For me going forward- it's new builds...starting a 8 3bed development next month !

Reply to the comment left by "Hugh Jass" at "16/04/2015 - 13:44":

Hugh - I agree, the actual construction for a new-build is relatively straight-forward. I was referring mainly to the difficulties of finding land, securing planning and the cost of S106/CIL, which one doesn't have with renovations. You may live in an area where planning and roof taxes are simpler, but in my main areas of operation, planning for infill sites continues to be an utter nightmare.

In addition, S106 costs of around £25K per 4-bed house has now been replaced by Community Infrastructure Levy at £365/m2, so even if by some miracle one gets planning permission on a site, a standard nice 175m2 4-bed house will cost £63,875 in CIL, out of a sale price of around £525K. This pretty well wipes out any profit if you are buying a site with planning permission secured by someone else, so not surprisingly small developers are being destroyed or forced to relocate, and small builders are having to fall back on nothing more than extensions and refurbishments because they can't find the sites.

OK,...I live in S.Wales- obviously different rules !

Hi Tony, I've just joined this group and was interested (& impressed!) by your offer to answer all questions.
Just a quick one - do you have any experience or connections with auction/bridging type finance companies? I've self funded half a dozen or so refurb projects to date here in Scotland but looking to upscale things a bit now in England, so would be looking for short term funding but realise there is a lot of noise out there - any good contacts?
Many thanks, David