Advice for new developers

Through careful planning, you can achieve your goals whether you are looking to build a home for yourself, or one to sell or rent out.

Land acquisition or development opportunities

There are many sources that provide opportunities for acquiring land or development projects, including:

• Estate agents
• Auctions
• Private sales (off-market)
• Other advertisements and contacts

Once you have found land that interests you, you might be able to purchase it straight away. However, if planning permission has not been granted or there is some risk surrounding this, landowners can sometimes agree to conditional contracts known as option agreements to help manage risk.

For example, a clause could stipulate that if planning permission is not granted within a specified timeframe, the contract can be brought to an end. If the conditions are met, the developer is usually obligated to purchase the land.

Some agreements give the buyer the option, but not the obligation, to proceed even if planning permission is granted. These arrangements can be complex, so it is important to take legal advice.

Planning permission

For most new buildings, and for major renovations to existing buildings, planning permission is required. Many development projects require full planning consent.

Local regulations

For larger residential developments, there may be local obligations such as affordable housing or infrastructure contributions. Understanding these early can help avoid added expense and delays later on.

Market research and feasibility study

For developers looking to rent or sell completed properties, thorough research of the market is recommended to assess whether proposed plans are suitable for the area.

It is advisable to carry out market research early and to consider factors such as the local economy, social demographics, environmental impact and demand for different types of accommodation.

Specification and finish

The specification and finishes of the development should be appropriate for the market you are targeting and must meet safety and building regulations.

Finance of the development

A preliminary evaluation of financing options is necessary before embarking on a development project. Common sources of funding include commercial or high-street banks, specialist property finance lenders, mezzanine finance, bridging finance and joint venture partners.

Build to sell and build to let

Some developments are intended to be sold once complete, allowing loans to be repaid from the sale proceeds. Others are designed to be retained and let, with borrowing repaid over time from rental income.