The next instalment of our weekly information panel for Property Developers. You can read last week’s briefing here.
Hosts of this weekly panel include:-
- Liz Hailey – Director, Bonnetts Solicitors
- Charlotte Moxon – Head of Regional New Homes, Strutt & Parker
- Matt Wilde – Head of New Homes – SPF Private Client Finance
- Ben Axton – Show Homes Sales Director, Alexander James Interiors
We are here to provide you with information and to help you, so please do contact us if you have any queries.
Weekly News – 18/05/20
Charlotte Moxon – Strutt & Parker
Although we have been “open” and working remotely from home, the Government news last week that we are able to commence viewings again is certainly a welcome relief for our team – we can now get back out and do what we love, with the correct precautions in place to ensure our teams, our developers and our buyers are all safe.
We are seeing a mixed response to this from buyers – we have agreed several sales from buyers who have been “chomping at the bit” to view; others remain very cautious about leaving the safety of their own homes as the country remains in lockdown.
On Tuesday 12 May we hosted our first live webinar on ‘The new world property era’ as part of Strutt & Parker’s Inspire Live webinar series. They covered popular human interest topics around moving, property prices, the rental market and the future of property as well as picking up on questions that were coming in live from the audience.
The audience was of a global nature with dial in from Japan, Hong Kong, France, Spain, Ireland, Germany, Oman, the UAE, Italy, Jersey, Brazil, South Africa and the US as well as the UK.
The audience were encouraged to join our dedicated and private Facebook Group ‘InSPire Live’ where we are continuing to build a community of consumers with property interests/current property concerns. It’s a great space for clients to ask Strutt & Parker questions and for our panellists to share their expert opinion in a positive personality and brand building way. It also gives us insight into what the clients need to know and what we need to be covering across future webinars, so please do joing.
Please find below the live recording from last week, and I would encourage you to join:
The next webinar is Tuesday 19 May at 10.30am ‘From the physical world to the virtual world.’ The panellists will be looking at how our worlds have been turned upside down and the impact this has on moving home in the future… including how the rise in technology is changing the way that we buy, sell, rent and let our homes; expect a big focus on our Virtual Viewings offering and how viewings will be conducted going forward based on latest government advice.
Matt Wilde – SPF Private Client Finance
Last week saw the relaxation of some of the lockdown rules and, for the housing market, an important change was the reintroduction of physical valuations in England. With an estimated 65,000 valuations waiting to be booked in across the UK this was a welcome move – with some reports saying it could take up to 2 months to clear the backlog and others stating it could be done in as little as 2-3 weeks.
Agents and developers alike have already started to see appointments being made by surveying companies, as they arrange their new safety protocols and bringing back the surveyors who were furloughed. We have received updates from a number of the banks who have started the valuation process and the majority of the mainstream banks including Natwest, Nationwide, Halifax, Santander and HSBC, have starting booking in physical valuations from today.
We have also seen quite a few of the lenders who had paused lending such as Foundation Homeloans, Precise and State Bank of India reintroduce products to the market and we are now not far off pre-lockdown options for buyers and clients looking to re-mortgage.
Liz Hailey – Bonnetts Solicitors
At last the news is becoming more positive, with more activity in the market and hopefully sales picking up.
However, in times when your cashflow will be more important than ever, I’d like to focus on ways to help you access the sale proceeds or, if you are looking to refinance, your mortgage advance, as soon as you can.
Many developers will have experienced delays in both sales and refinance transactions. You can, however, help yourselves overcome some of the issues and frustrations that arise along the way.
These are some of the things that often cause delays:
1. Make sure that your site and plot plans are up to date, properly drawn to Land Registry Compliant standards, accurately show whatever rights of way and parking, etc, are to be granted to buyers. It is essential to have good plans drawn up by a professional experienced in the preparation of Land Registry plans. Very often your architects’ plans will simply not be enough.
2. If the estate that you are developing is to remain private, think about how you are going to organise service charges and contributions. Will you set up a residents’ company, to hold the communal parts for example? If the estate is leasehold, what are your plans with the freehold?
3. Make sure that your planning consents are available and, crucially, that all conditions are discharged, with proof of such discharge being available. Very often you will not be doing this yourself and will be relying on a planning consultant or architect to be doing this for you. Make sure they have these ready as soon as possible.
4. Building Control sign off is another thing that will very often hold things up, particularly with the backlog of site visits.
5. Make sure the information pack relating to your structural guarantee (NHBC, or the like) is ready to supply.
6. Always keep a copy of any Section 106 Agreement that you have entered into with the Council to hand (they are notoriously hard to get out of the Council), together with written evidence that all payments that are due to the Council have been made..
7. If you are in a local authority which is now governed by CIL payments, make sure you have the CIL notices and again, evidence of payment in writing.
8. Get your solicitor to check that the Council have released from the Land Registry any entries that they have put on the title in respect of the s106 Agreement and to check the title early to ensure no third-party certificates of compliance are required. Dealing with these early, can save weeks later on in the process.
9. Make sure you are in contact with your lenders early on to ensure that requirements in relation to any partial discharge of security can be lined up well in advance.
10. Engage with your solicitors in advance to ensure they can prepare a full pack to send to buyers or lenders which can include answers to enquiries. We can pre-empt what we know will be required and save time by dealing with this at the outset.
We have considerable experience in acting for developers not just in the acquisition of sites but also in development finance, refinance, preparation of sales packs and plots sales. Feel free to contact us for a no obligation chat. I am sure we can help you get things ready to be able to access the cash quicker!
Ben Axton – Alexander James Interiors
Following the recent Government announcements with many sectors slowly returning to work, we thought it may be a good opportunity to outline the benefits of Show Homes and what they can mean to your GDV.
There is a stark difference between ‘Home Staging’ and installing a cohesive ‘Show Home’ which has been thought through and engineered by a professional Interior Designer. The main difference to a developer however is cost, home staging can be done very cheaply but will not give you that return on investment and maximise your gross development value. We see first-hand, on a weekly basis what spending the additional money on a bespoke Show Home can bring to the table.
Earlier this year we installed a 4 bed Show Home for a well know PLC Developer in Richmond. This was a reasonably high end development although some of the larger house types had been slow to sell. Within 48 hours of that scheme being installed, an overseas client had viewed, offered and secured the property, buying the house ‘turnkey’ complete with all furnishings. The client had achieved a full sales price with no additional issues of moving the furniture into another plot. A win win scenario.
A client of ours had two 7000 sq ft (vacant) houses for sale in Cobham, Surrey. The agent had worked hard over a 6 month period to sell both properties with circa 90 viewings but not one offer. The client removed both houses from the market and dressed one fully at a cost of £180k. When the properties were relaunched, the dressed house had received two offers within a 2 week period, the buyer going on to pay full asking price and buying the property, ‘turnkey’. The second house sold shortly afterwards.
Our experience has shown us that around 60% of our Show Homes are sold to an incoming purchaser, proving there is real value and ROI when using an experienced an established Interior Design House. Ultimately, having the right tools to sell and maximise price is key in any market place but emphasised in a tougher market. At AJI, we not only provide a range of Show Home products but can also offer finance to developers meaning they can spread the cost of a show home over a 1-5 year period. This frees up initial capital that can be used on further developments and gives the client peace of mind with a fixed monthly payment.
Do contact me directly should you wish to discuss your requirements further.