Life As A London Property Developer
I have decided after a lot of recent requests to talk a bit more on the blog about what I really do for work. As well as working as an interior designer, my husband and I work with a wonderful team of builders to develop properties. The reason I haven’t blogged about it that much up until now, is simply because I don’t think that the pictures are very pretty and probably not what you want to see. Writing about spreadsheets and mortgage finance has limited interest and I spend most days either paying bills or in Screwfix collecting something that they sadly forgot to deliver!
This blog is my place to escape and enjoy the prettier side of the property business, but today I will share a little of what being a property developer involves...
- The first and most important thing is finance as without that there would be nothing to develop...I have had to be extremely creative over the last 18 months about the financing of the projects as lending is incredibly tricky at the moment. My advice to any would-be developer is to either work with an extremely talented and trusted advisor for this, or to do it yourself as I am now doing. It does involve a lot of financial reading and research as well as a lot of time spent in meetings with banks, but it can be done and once your forge a couple of good relationships it all becomes a lot easier.
- Then you have to find a project. In South-West London where we are working finding any property is a challenge, but finding something that has a healthy profit margin is verging on impossible. There is such a short supply and such a huge demand that most things are coming to the market and going to sealed bids within 48 hours...as a developer it’s even more challenging as you’re competing with people buying for their own home and to them the margins aren’t important, so they will pay more. On average I look at 2-3 properties a week that would be suitable for developing and put in an offer on most of them – the result so far this year is that we have been successful in getting one, which shows quite how competitive it is! We aim to do two a year, but have to look constantly as you just don’t know which you’ll be lucky with and which you won’t.
- Once the property is under offer and you are close to exchange I then start work on the planning application and party wall agreements. It’s vital to do this as soon as possible - delays of even a few weeks are very costly. Mortgage payments start as soon as we own the property and waiting two months for planning approval, while no work is happening on site, is just not an option. These few weeks are always stressful as until you have the stamp of approval there are no guarantees!
- Then building can start – we are lucky at the moment that we have a great team, but we have to keep them in work constantly as otherwise we could lose them to someone else and that job could take months, which would really mess things up for us. The building industry in London is booming at the moment and most contractors have spoken to recently don’t even have time to quote for new jobs, so we really need to hold onto our team!
- During construction it is my job to source all materials, which involves a lot of time in places like Travis Perkins and B&Q - almost all the trades I deal with and source from are men. Building and construction is understandably a very male industry and I often go for days and days without seeing another woman, which is when working for myself and being able to meet up with a girlfriend for lunch or a coffee is a real bonus.
- Finally all being well {and there are always a few nasty surprises!} the work is done and hopefully within the budget. This is another tense part when you get the agents in to value with all fingers and toes crossed that you have actually made a profit...there are no guarantees in this business!
As you can see from these pictures we have now made it as far as bullet point four on our current project and so far progress is good. We're doing a loft extension, side return and rear extension as well as a first floor extension and full refurb and hope to finish by September. Later this week I will show you pictures of one we did last year; exactly the same as this but the finished version.
