New Build Development Diligence

This week Chris and I took the day to do a site visit with key members of our power team to help us work through the latter stages of our diligence. 

With encouragement from the Government to ‘build, build, build’ we reckon there will be many investors already actively building new houses or interested in doing so. With that in mind we thought it might be helpful to share some thoughts on an opportunity we are looking at. 

A picture paints a thousand words, and a video even more, so here’s one we prepared earlier…...😁

In this brief video we run through what we are considering in terms of development on the large garden plot of a detached bungalow.

https://youtu.be/Ev7cWOE8CdY

We met at the site with our Architect and Building Contractor which ensured we got the most out of our visit there, and what a valuable meeting it was. For example, in discussing our options with the site ie improving the existing property under permitted development (PD) and building 4-5 new houses on the grounds, we learned a number of key things. 

Here’s one of those things - the alterations to the existing bungalow would fall under PD, however, if we were to apply for planning permission, gain consent and then implement that planning (ie start) it would invalidate the PD on the existing building. So in short, strategic timing and having a good architect to guide you are essential. In a situation like this, our architect suggested, one approach could be to use PD and do a pre-app for the rest concurrently.

Here are just a few of the many learns/takeaways/avenues to explore further that came out of the site visit and meeting:

• You can have (develop) 5 houses max when accessing the plot from a private drive so no point going for anymore
• With shared ownership of a private driveway we’ll need to find and understand deed for rights of access (ie how many houses does it allow)
• We’ll need to enquire about possibility of moving a telegraph pole and power line - how, how much, who?
• Utilities wise we can enquire about air source heat pump grants and providers, can also look into solar and what available in terms of a feed in tariff
• Need to open a conversation with a neighbouring property owner about possibility of acquiring a small bit off their garden to improve access

• We’ll be exploring 3 options to compare cost, ROI and optimal all round outcome
• 1) buy the back bit of garden and reconfigure the 2 bed to 4 bed, then add 4 new houses
• 2) keep entrance the same, shave off the front bedroom and reconfigure bungalow, then add 4 new houses
• 3) keep entrance the same and demolish the house to then reorganise the whole site - factor in how much potential loss in cash flow from downtime vs the overall value uplift
• Key action to submit a pre-app through our architect

We’ve got a busy week ahead of us.

What have you learned from your property power team that you are actioning this week?