Property Developer Solutions

UK property market

For Property Developers the largest gain is made on the implementation of a planning permission. Taking Greenfield land and obtaining Residential Planning Permission can increase a developers return by in excess of ten times. The planning process is an extremely slow progression and whilst assets are held and the planning route is undertaken values are often little more than Agricultural Land.

The current market

The UK property market has been in decline since 2007 and Property Development Companies have faced a considerably tough time. Those who have weathered the storm in many instances have had to sell off some of their prime assets at prices which were much lower than previous valuations. This has been a necessity in order to survive.

The UK property market will recover and those Developers who have survived the downturn should be in a stronger position to return to profit.

The market may not be the same as before with continued lending uncertainty from Banks. In any case, Developers who have a strong track record with developments fitting Banks lending criteria, i.e. within London, seem still to be able to source funds. The Banks are choosing very carefully who they lend to and in many cases countless developments do not meet with their strict criteria.

Developers have to be more innovative in how they operate, working with private investors who will fund a deal on a joint venture basis or using Mezzanine Finance to fund site acquisition.

The key is three million new homes need to be built in the UK by 2020 and we currently are massively behind schedule in meeting this target.