Property Development Finding A Property For Development

Date Published:

04/06/2008

Adding space to a property is one of the more reliable ways to add value to a development. Buyers will pay a premium for a converted or extended property as long as the workmanship and finish is good.

But a developer has to be conscious of the 'ceiling' price for a property of its type: even with extra rooms, it can be hard to sell a house for significantly more than others on its street. Another point to keep in mind is the balance of a property. A small terrace can feel cramped with extra rooms in the loft. A good architect or surveyor will be able to help here.

Other projects are harder to make pay. A house with severe structural problems will put off many buyers, and newcomers to developing should be wary. Mr Morgan is especially cautious about properties that have suffered movement, such as subsidence. The issue for developers is that it is hard to predict the cost of remedial work, and so the eventual profit.

A property that only needs cosmetic refurbishment will be a safer option, but margins can be thin. The difference between a tired and a smart property might only be a few per cent, and developers need to be wary of spending too much in order to secure a sought-after property.

The best developments, experts say, are properties where a lay observer fails to see the potential - or fears that the work will be much more costly and complicated than it is. Often this means mixing elements such as adding space, changing layouts, updating decor and fixing minor structural faults.

'If you take something, physically change it and make it beautiful you will maximise your money,' says Mr Morgan.

Contacts

Royal Institution of Chartered Surveyors (RICS)
www.rics.org.uk

Royal Institute of British Architects (RIBA)
www.riba.org

National Association of Estate Agents (NAEA)
www.naea.org.uk