Are you a property developer or considering planning a big home renovation project?
If you’re planning on a big renovation, do you need it to add value to your property? Or if you’re thinking of starting from scratch on a new build home, do you want to maximise its value and keep it on budget and on your schedule?
If you’re starting out in property development, you’re likely to encounter unexpected challenges, steep learning curves and plenty of decisions that can make or break your project.
From managing costs to appointing the right team, the decisions you make early on will influence not only your profitability but also the overall success of your project.
Over the years, HEM Architects has worked on projects with lots of property developers. So here are the tips we’d give to new property developers, or if you’re not a developer, the advice can apply to any large project, to ensure it’s a success.
Appointing the Right Consultants Early On
One of the most common pitfalls for new property developers is delaying the appointment of key consultants.
A new property developer might try to save money by holding off on hiring the full project team until later in the process, only to experience costly delays and last-minute changes.
If you bring in consultants for planning, highways or ecological surveys too late you might find that adjustments need to be made to meet key technical requirements.
This can lead to significant setbacks, most importantly extra costs, as you attempt to rework the design to fit within policies and regulations.
We’re seeing this happen more often, even with smaller-scale projects. In many cases, getting the right consultants involved from day one can make a huge difference to the outcome of your project.
While design is important, gaining planning permission often hinges on meeting technical requirements like arboricultural studies, flood risk assessments, and transport planning.
In the long run, hiring experienced consultants early on can save you both time and money.
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Understanding the Cost/Time/Quality Triangle
It’s essential to understand the cost/time/quality triangle—an adage that’s common in project management. You can only have two of the three elements at once.
This principle is especially relevant when it comes to securing planning permission.
If you want to save time and keep costs low, you might have to compromise on quality. If you want high quality and low costs, it will likely take longer. And if you want a high-quality result quickly, it won’t come cheap.
However, this approach can lead to delays and increased expenses in the long run. Many projects end up having to pay for a second round of plans and consultancy to fix mistakes made by cheaper draftspeople who didn’t fully understand the complexity of the site.
It’s essential to see the value in a good architect and design team, as they can ensure that your development is both financially viable and able to meet planning and design standards.
Maximise Value, Not Just Size
While it’s tempting to focus on maximising the floor area of your development, this can sometimes lead to diminishing returns.
In fact, building more space often results in higher costs per square metre, which may not align with the final sale price of the property.
Instead of focusing solely on size, think about how to maximise the overall value of the development.
This means considering the quality of the design, the materials used, and the layout. We’ve seen projects where developers are rewarded with higher profits by downsizing their plans, reducing construction complexity, and still realising a high sales price thanks to smart design and optimised use of space.
case study: pitchford lane
We worked with a developer client who bought a site with planning permission in Fulwood.
They wanted an architect that could deliver a full technical design and service that would minimise their risk during the construction.
We were also able to increase the market value of their property by adding another story onto the property.
Know When to Keep It Simple
When you’re just starting out, simplicity is often your best friend. Especially for new developers, keeping your project straightforward will help you avoid unnecessary risks.
This is particularly true in the construction phase, where unpredictable challenges and fluctuating costs can quickly eat into your profits.
One option for developers we are seeing more often is to consider selling plots with planning permission rather than building the homes yourself. This can be very lucrative.
Selling a site with permission allows you to avoid the construction risks while still realising a profit.
It also gives you the opportunity to focus on maximising the number of units or enhancing the design to increase the plots value before selling.
Plan Your Exit Strategy Early
Having a solid exit strategy is one of the most critical aspects of property development, yet it’s something a new property developer may overlook.
Whether you plan to sell the property post-development, rent it out, or hold onto it as a long-term investment, your exit strategy should guide your decisions from day one.
For example, if your goal is to sell with planning permission, the design of your project should focus on maximising market appeal and profitability.
On the other hand, if you plan to build the property yourself, your focus might shift towards keeping construction costs low and managing risks during the build phase.
Ultimately, your exit strategy will influence every stage of your project, from the design and planning process to how much risk you’re willing to take on and the profit you will ultimately make.
case study: stamford road
A&JH Property Management Ltd asked us to replace a tired 1950s house on the edge of a Conservation area with 2 large, detached homes.
They’d previously worked with an architectural technologist on a pre-application for the site but had received a negative response.
Through a considered design process and a series of careful discussions with the planners we were able to transform perceptions of the development. Turning a negative response into a project which was fully supported by officers and approved under delegated powers.
In addition to this we achieved planning for a significant increase in the developable floor area proposed in the original pre-application.
The value of working with an architect
Starting your journey as a property developer is an exciting time, but it’s important to approach each project with the right mindset, a solid team, and a clear understanding of your goals.
Whether you’re aiming to build, sell, or invest in property, following this advice can help you avoid common pitfalls and ensure your projects are profitable and stress free.
Do you want to maximise the value of your home?
Contact us today to keep your project from going off the rails and costing you money.