Tag Archives: Property development

I Am A Property Developer – Ask Me Anything! Ask Me Anything, Latest Articles, Property Development, Property Investment Strategies, UK Property Forum for Buy to Let Landlords

I run a small property development business in the Reading, Wokingham and South Oxon and Bucks areas.

The company organises planning applications on small sites of up to 4 flats or houses, then secures the financing, oversees the design and specification, and commissions and project-manages sub-contractors to do the actual construction. I also undertake whole-house property renovations and act as landlord when I rent out existing detached houses on sites where I am assembling additional land or sorting out access and planning issues. 

My tenancies are usually graduate houseshares/HMOs as I find these give a more reliable income stream than renting to a family.  I Am A Property Developer - Ask Me Anything

I moved into property development from being a BTL landlord as I felt the returns would be better – perhaps not the wisest of careers moves in 2007!

I am inviting Property118 contributors to “ask me anything” as regards small-scale property development if they are considering this as an additional aspect or future evolution of their rental business.

I don’t claim to be able to answer everything as property development is a very wide-ranging field and can be highly specific as regards local valuations and planning rules, but I will endeavour to help.

My property investment career – please help me to make some choices Latest Articles, Property Investment Strategies, UK Property Forum for Buy to Let Landlords

I have questions which I’m sure many people outside of property investment ask themselves before drawing a blank or getting confused or deciding they don’t have enough information to make a decision.

“How much money do I need to begin a viable property development business?”


“What’s the most sensible route as an entry point?”

I’m in a position right now to seriously consider this, having just been given notice of redundancy. I have savings, shares, redundancy money and the option to release equity in a flat I have which I currently let out. Altogether this would amount to around £250k. Below are the scenarios I’m considering as viable options. It may help to know I’m 45 and have a family of dependants:

1) All in – Devote all my energy into buying high yield properties in the north of England, circa £50-60k @ £400 to £450 per month rent. My property investment career - please help me to make some choices


• Lot’s of fun and what I would prefer – an adventure!
• Steep learning curve
• Large portfolio to spread risk


• I’ve no experience in managing a large portfolio
• Lower equity yield than most property
• I live near Watford
• Can I deal with the admin?

2) Eggs in one basket – Buy 1 or 2 flats in west London (where my current flat is), @ between £1,2oo to £1,700 permonth rent


• High equity yield from London Cross Rail benefits
• More local to maintain
• Easy to rent to professionals


• Low rental income means it could not be my “new profession”
• Lower relative rental yield than north England option
• Slow way to build portfolio

There’s a third option which would be to buy up to 8 houses in South Wales, where I originally hail from, which would give me a geographic advantage and I also have family and friends who are tradesmen and could possibly manage the properties, which falls in between the first two options.

As you can see from my options, I’m stuck between the pragmatic and the adventurous options and I may not get another opportunity to chase my dream again, but I’ve got a lot at stake if I fail.

One of the things I’ve been interested in pursuing is a mentor system where an old hand in the housing game could act as mentor, for free, or a small stake in the business. Maybe someone who works in a different location, is semi retired, or deals with much bigger fish, so as not to have any conflict of interest. Does such a thing exist? If not, is that something we can kick off in this forum?

What I’m seeking from you all is your opinion or advice, all of which will be gratefully received!



Development Finance – Where do you start? Commercial Finance, Latest Articles

Borrowers are still being frustrated by the banks’ continued reluctance to lend on development finance projects, but reality is that if you know who to ask they are actually eager to lend on profitable projects to experienced developers.

It is navigating a way around the maze of lenders, different products and finding the finance that enables your project to be finished that can seem impossible. Many new lenders have entered the market since the Credit Crunch which has increased competition and resulted in various pricing structures.

I get to chat with many readers about their development projects, but the simple fact is that unless you do it day in day out, which I don’t, it is impossible to know which lenders have funds to lend, and on what type of projects and industry sectors they want to lend on.

I know the basics to ask, such as purchase price, planning permission, development cost, Gross development value, working capital, previous experience etc. This then gives a picture of whether a project is likely to be considered as viable for development finance, but is only really the first step on the ladder.

This is where my Colleague Cliff from Brooklands Commercial Finance comes in as he can navigate this maze of knowing which banks are lending. Cliff has established strong links with many lenders based on the quality of our introductions over many years and understands how to present robust propositions to lenders, each of whom have a specific target audience. This is the key to putting you, in front of the lender who is most likely to offer a finance package to support your project.

Cliff can help with:

  • Residential and commercial property development – rates from 4% over base
  • Structured loans from £75,000 to £25,000,000
  • Development projects throughout England, Scotland and Wales
  • Individuals, companies, partnerships
  • Terms from 1 month to 3 years
  • No exit fees
  • Flexible underwriting and the best deals
  • Unusual proposals
  • 90% property development loans available
  • Mezzanine finance and second charges
  • Joint venture funding
  • Guaranteed exit strategies
  • Residential, mixed use, leisure, health, offices, industrial, etc.
  • Conversions*

*There has been a relaxation in planning regulations in respect of office conversion to residential accommodation.

Brooklands Commercial Finance are Whole of Market Independent Commercial Brokers and if you would like to chat with Cliff please Click Here

or email info@property118.com

or call us on 01603 489118Development FinanceDevelopment Finance

Mezzanine Finance for Developers Commercial Finance, Latest Articles

(By Malcolm Jones of Brooklands Commercial Finance)

Despite the Banks recent profit announcements, Developers are still being frustrated by their continued reluctance to lend. When Banks are prepared to lend on development projects the percentage of costs or of the Gross Development Value (GDV) is often so low that it is not workable.

Many borrowers are now turning to Commercial Finance Brokers such as ourselves to assist with raising the total finance required.

Most property development loans can be broken down into Senior Debt loans and Mezzanine Loans. The Senior Debt element is the amount lent by the bank or finance company and this is often limited to 60% of the costs. Mezzanine finance is a second charge loan that sits on top of the senior loan and hence the name “Mezzanine”.

Mezzanine Finance

Due to the dramatic drop in bank lending to the property sector in recent years, many successful and profitable residential developments have made use of Mezzanine finance. With the Senior debt lender funding 60% of the costs the Mezzanine lender will often lend 30% of the costs, leaving a requirement of only 10% from the developer.

The finance can cover the costs of the land purchase, site and infrastructure costs, build costs and professional fees.

By using Mezzanine finance the developer is able to reduce his equity contribution, spread his risk and considerably enhance the percentage return on his own invested funds. Although Mezzanine finance is more expensive than Senior debt, there are many financial advantages.

For example:

Mr A goes for low gearing Mr B goes for high gearing
Mr A invests £200,000 in building 1 house Mr B invests £200,000 in building 6 houses
The GDV is £600,000 The GDV is £3,600,000
Finance at 50% £200,000 Finance at 90% £1,800,000
Finance cost £50,000   Finance cost at £450,000
Net Profit £150,000 Net Profit £550,000
Gross Profit 33% Gross profit 33%
Return on developers money 75% Return on developers money 275%

Because of the increased risk to the mezzanine company, they look for experience developers, good projects and a reasonable profit level.

If you require any assistance with Development finance please Click Here

Mezzanine Finance

Appealing canal side student development in Chester Latest Articles, Property For Sale

Located next to the picturesque Shropshire Union Canal and Bridge Lock, this canal side student property development consists of just 36 en-suite student rooms spread across 2 separate blocks. It is located just a short walk to all of the universities and the city centre and will definitely be an extremely attractive accommodation option for students wanting a mix of great location and fantastic facilities. Continue reading Appealing canal side student development in Chester

Residential Property Development up by over 15% Commercial Finance, Landlord News, Latest Articles, Property Development, Property News

arrow up graph of stacking housesThe value of private residential property development projects starting on site is up 15.2% compared with the same period in 2012 according to fresh figures from just release by construction industry analysts Glenigan.

The UK construction industry has seen a rise of nearly 1.9% in new building project starts in the three months to May, led by growth in the private housing sector

Gains in private housing starts valued at under £100m were focused in London and the South East in the past month, but increased activity in Yorkshire and the South West in April also boosted the index. Starts on several other private housing projects worth over £100m will give the Minister of State for Housing Mark Prisk who has led the Government’s Help to Buy and NewBuy schemes further cause for positivity.

Development Funding:

Property developers are now taking advantage of improving finance options and returning to the market to develop land and to pursue new and abandoned conversion projects. We have seen lenders coming back into development funding, as demand for housing rises and the economic outlook improves.  We are definitely witnessing an increased appetite from lenders looking to lend.

Below are examples of Development finance terms that are currently on offer:-

  • England, Scotland and Wales
  • Individuals, companies, partnerships
  • 70% property development loans available
  • Mezzanine Finance
  • Joint venture funding
  • Non-status loans/poor credit history
  • Rates from 0.75% per month
  • No exit fees
  • Interest rolled up into the loan or serviced
  • Arrangement fees added to the loan
  • Transparency – No early repayment penalties or hidden charges
  • Interest calculated only on the amounts drawn
  • 65% day 1 value, 100% build costs

To have a development project assessed you normally need to provide the following information:
A description of the project
A recent CV to show experience in property developing (if a builder or property developer)
Statement of your business/personal assets and liabilities
Plans and drawings
Confirmation of Planning Permission

To achieve optimal development finance terms for your project you need the right contacts with excellent presentation skills and a reputation for success to put your business funding requirements to tender.

Please complete this enquiry form and we will be delighted to introduce you to the right person for your individual needs.

As founder members of the National Association of Commercial Finance Brokers “NACFB” since 1992 we have all the contacts and connections you are likely to need.

Development Finance Enquiry Form

Step 1 of 2 - Your contact details

Capital Allowances – Tax savings for HMO and Multi Let owners Landlord News, Latest Articles, Property News

Council Tax CalculatorPart 2 of 2 written by Bill Loryman

The first reactions from Property Investors hearing about Capital Allowances are that they sound too good to be true and that,”surely my Accountant has identified them for me?”

Well, firstly they have been around since 1878 and are not a tax loop-hole or tax avoidance scheme. If you own a commercial business property, including an HMO or Multilet, you are entitled to claim Capital Allowances for them.

Secondly, the process of valuing the likely tax savings has to be completed by Capital Allowance experts who need to send Surveyors into the property to assess the “plant & machinery” – fixtures and fittings – assets etc. that are in the fabric of the building. They then prepare a typically a ten page report, with photographs, plans and a detailed analysis of all the qualifying assets that will satisfy the HMRC guidelines on submitting Capital Allowance claims.

This is a very specialised tax service that many accountants simply outsource in order to help their clients. A specialist will help you submit a claim, or work with your accountants to work out how much tax and money you can save, either as a tax rebate or off-set over future years.

• You need to be a UK tax payer. The investment property can be owned by a Company or a person. Whether the tax band is 20%, 40% or 50%, the higher rate you pay the greater the tax benefit and savings.

• The minimum value of a property really needs to be £150k but total value of portfolio qualifies. If you are buying this year or last you can qualify for AIA (Annual Investment Allowance) of up to £250,000 which can help make the claim successful and give substantial tax savings.

• Your accountant will claim for the furniture and general repairs but Capital Allowance surveyors look into what makes the building work, so the hidden assets unclaimed in the fabric of the building, items such as heating installation, wiring, lighting, fire alarm systems etc. are all valued using Quantity Surveying rules that confirm to the HMRC guidelines on submitting Capital Allowance claims.

Three of our recent examples are shown below:

Sussex Hearts Norfolk
HMO/Multi Let Purchase Price £280,000 £155,000 £205,000
Capital Allowance Identified £28,000 £12.500 £9,200
Net Tax Saved £14,500 £3,500(refund) £7,680(refund)

Clearly everyone’s tax situation is different and you will need to discuss preliminary details in order to get an illustration of the likely tax savings such as property address, type of business – Multi-let, HMO, student let, holiday let etc, date of purchase and the price paid plus the value of any improvement work you have carried out.

When you (and your accountant) decide to go ahead an engagement letter to be signed which gives the authority to contact the Land Registry to ensure no previous claims have been made. The property will then be surveyed for qualifying assets and a full report prepared for submission to HMRC.

The whole process typically takes about 10 – 12 weeks and should always involve your accountants. Fees for this service are usually generated out of a small percentage of the claim value on a ‘no claim – no fee’ arrangement.

Bill Loryman is the Managing director of HMO Tax Limited and has 20 years experience in the property world involving franchising, licensing, acquisitions and property development.

If you would like an illustration form of your likely tax savings on your investment property please complete your details below.

Oops! We could not locate your form.

Capital Allowances – Reduced tax bills for HMO owners? Latest Articles

Calculator on refund formPart 1 of 2 written by Bill Loryman

HMRC calculates that over 90% of properties have not claimed against their Capital Allowances. Recent changes by HMRC still mean that Capital Allowances can be claimed against the Plant and Machinery (such as fixture and fittings) or assets within the ‘non-dwelling areas’ of your property. These can be used to obtain a tax refund or to reduce your current year’s tax liability.

If you own a House in Multiple Occupation (Multi-let / HMO’s / Student lets), it is very likely that you are entitled to unclaimed Capital Allowances for the communal (non-dwelling) parts of your investment property and many of the associated fixed assets.

Capital Allowances have been around since 1878, yet they are almost never claimed, or often claimed incorrectly. In fact HMRC have said that over 90% of eligible properties have not claimed the tax that is due. Is your investment property one of them?

Anyone who has an investment property is entitled to claim these allowances.
•Key Worker accommodation
•Dentists / Doctors shared properties
•Student Lets
•Professional Lets
•Licensed and unlicensed HMO’s
•Holiday Lets (UK & EU)

Capital Allowances – what are they?

They are Plant & Machinery allowances that relate to the tax relief associated with certain qualifying items, such as fixture and fittings or assets within the ‘non-dwelling areas’ of HMO, multi-occupancy properties and student lets/ halls of residence.

In each year that you buy a property, you can deduct up to £250,000 of your capital outlay (purchase cost) associated with these non-dwelling areas. Once these items have been identified, valued and documented, you can reclaim previously paid Income tax, reduce your current year income tax liability, or roll forward the allowances until such time when they are required. This is unlike normal rental losses which can only be rolled forward until such time that the property makes a profit, Capital Allowances claimed on the property, are ‘set-off’ against any income stream.

Part 2 will include details of who might be able to claim and the process.

Bill Loryman is the Managing director of HMO Tax Limited and has 20 years experience in the property world involving franchising, licensing, acquisitions and property development.

Development Finance Terms and Criteria update Commercial Finance, Landlord News, Latest Articles, Property News

Property Development FinanceWe are working with a range of dedicated Development finance lenders for our readers to get the best criteria terms and conditions available in the current market.

The Lenders are all long established and recognise that a good development project carried out by an experienced developer deserves consideration based on individual merit, rather than a “computer says no” attitude.

Below is an update of some of the latest examples of Development finance Terms and Criteria that are currently on offer:-

–          Residential and Commercial Development

–          New build or conversion

–          65% day 1 value, 100% build costs

–          Rates from 0.75% per month

–          No exit fees

–          Non-status loans/poor credit history

–          Interest rolled up into the loan or serviced

–          Arrangement fees added to the loan

–          Transparency – No early repayment penalties or hidden charges

–           Interest calculated only on the amounts drawn

–          Available for deals in England, Scotland and Wales

We have witnessed some quite amazing proposals from clients who have identified significant opportunities to either rescue a previously failed development project or to create their own vision of a project.  We also know that no two propositions are the same, each having their own unique profiles.

To discuss any commercial deal with our preferred commercial finance broker please use the relevant links below, call us on 01603 489118 or email info@property118.com

For Development finance please click here.

For Commercial mortgages please click here.

For Bridging finance please click here.

If you would like to add your own requirements and search for the most popular available Buy to Let products please click here

Buy to let auction property finance calculator

Development Finance Story of a very happy Property Developer Commercial Finance, Landlord News, Latest Articles, Property News

Property Development FinanceA Property118 reader has shared this story with us – he’s a Property Developer and was struggling to find the right Development finance.

Our reader first contacted us in the Spring of 2012. He was very frustrated at that time as he had an incredible opportunity to acquire a former riverside warehouse and convert it into modern flats. However, his bank was not interested in funding the project and neither were any other banks he approached unless he could put 50% of the money up himself. Continue reading Development Finance Story of a very happy Property Developer

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