Stretching your equity further
Find out 7 popular ways to stretch your equity, source the funds you need and maximise your cash return.
What makes a good property developer? The key to success in property development is having the right team around you and it is here the saying ‘you’re only as strong as your weakest link’ rings true.
Success in property development is not reliant on one person, i.e. you - it’s determined by how you choose and structure your team, and the calibre of the professionals you work with.
Contents:
- How to choose the right property development team
- Architect
- Main contractor - builder
- Structural engineer
- Mechanical engineer
- Quantity surveyor
- Project manager
- Party wall surveyor
- Planning consultant
- Contract administrator
- Flood risk and SuDS strategy consultant
- Transport consultant
- Commercial space strategist
- Interior designer
- Landscape consultant
- Development finance platform
How to choose the right property development team
Choosing the right team can enable you to enjoy the financial fruits of a successful property development project, rather than spending hours with your accountant wondering how to cut your losses.
But how do you work out who you need in your team to help you and how do you find those reliable professionals who will make up your dream team?
Who you pick is dictated by the scale and complexity of your project – and the demands of local planners.
The bigger your development, the more experts you may need, but planners, architects, drainage and traffic consultants are relevant to many projects.
Good references from people you trust are essential. Many professionals continually work together, so for instance your architect may be able to recommend the other experts you may need.
Here’s a list of the most-needed consultants; it isn’t exhaustive - you may need to appoint other experts - but it does give you an idea of just how many professionals are involved in a project.
Architect
Think of an Architect as similar to a GP, with a good all-round knowledge of the skills your project needs – and if they don’t have those skills, they can refer you to someone who does.
Their job is to turn your property development dreams into a reality and ensure they can work.
Architects should have the know-how to ensure your building meets planning and building regulations, making sure you avoid any costly hurdles further down the line.
If necessary, some architects are qualified to take the lead in managing your construction project too (especially on smaller projects).
So when choosing an architect, consider whether you want someone who specialises in the type of work you want to do, be aware of their design style, modern or traditional, and if you want them to work in a large or small practice.
In the absence of any recommendations, a good place to start your search for an architect is the Architects Registration Board. Anyone describing themselves as an architect must be registered with the ARB.
Another way can be to check the architects on planning applications submitted on the local planning portal. If you can find architects that have worked on similar projects to yours, and / or are named on multiple applications, this suggests good knowledge of the local planning rules, and also (hopefully) a good relationship with the planning department.
Main contractor – the builder
Your builder translates the architect’s plans into the finished development.
When selecting a good builder, it’s not just about their workmanship, but also organisation and team management.
Your main contractor should be someone who can stick to deadlines, has good contacts with suppliers, and is prepared to keep you updated about progress during the build. He or she should also have good relationships with other contractors, such as electricians, plumbers and joiners.
The Federation of Master Builders has a free online builder tool so you can search for a master builder in your area. FMB members are professionally vetted and independently inspected.
Contractor financial strength is equally important. Lenders are always nervous of a contractor going under during a construction project, so make sure you do your homework.
Check Companies House for their accounts and whether the owners have been involved with businesses that have previously gone into involuntary liquidation. Also, ask the contractor for management accounts, so you have up to date data supporting your decision-making.
Structural engineer
Want to make sure your building doesn’t collapse around your ears? This is the remit of a structural engineer. Structural engineers work closely with architects and design & build contractors.
Their job is to calculate loads on a structure, fit the design and structure together and to advise on the right materials to use. It is this work and these calculations that are the core of the project and also form the basis of your new build warranty.
To find a structural engineer and more information on this topic, visit the Institution of Structural Engineers.
Mechanical engineer
Mechanical engineers design, install and maintain equipment like lifts and air conditioning, but also your plumbing systems. They are responsible for the correct implementation and safety of such installations, and normally work closely with the electrical and civil teams.
Quantity surveyor
One of the most important roles in your project, and one Brickflow would always advocate employing. Your quantity surveyor or QS has an accountancy-type role in your development project.
Quantity surveyors cost the scheme at a granular level, and include all the labour and materials that will be needed throughout the project.
They are there as a checkpoint, working with your main contractor to ensure the construction methodology is sound, and that there are no surprises.
The benefits of working with a QS are huge. By properly costing your project upfront, not only should there be no nasty surprises once you’re in the build stage, but it will also shape your opinion on how much the site is worth. Once you know the end Gross Development Value (GDV), the build costs, funding costs and how much profit you want to make as a developer, whatever is left over is what the land is worth.
Some Quantity surveyors can also undertake the project management role.
The Royal Institute of Chartered Surveyors has a directory of over 40,000 surveying firms so you can check your surveyor’s qualifications via its find a member tool.
Project manager
A project manager is responsible for overseeing the successful delivery of your project, hopefully on time and on budget.
A project manager’s role is wide and varied; it will generally encompass the role of a QS (although a separate QS may also be used on bigger projects), but it can also go much further.
Project managers will be working with the planners/architect to understand the scheme and the challenges, which in turn helps them choose the right construction team. They’ll negotiate contracts, agree and monitor budgets and schedules, keep on top of deadlines, check the quality of work and ensure suppliers deliver the right materials in the right quantities when they are needed.
If you lack experience as a developer, a project manager is crucial – as is the case with other roles, look for a project manager with experience in similar projects; someone with a good knowledge base, who is a good communicator and can provide details of previous clients for you to speak to.
For less experienced developers, you may find that the lender insists on you appointing an experienced PM in order to get the loan.
Party wall surveyor
A party wall surveyor is often a structural engineer, although this person can be an architect. Party wall surveyors deal with potential disputes that may arise under party wall regulations, and attempt to resolve them. Find party wall surveyors online and more about party walls here.
Planning consultant
Planning consultants research and advise on suitable development sites, investigate any potential environmental issues and draft and submit planning applications on behalf of developers, to local authorities.
For large or disputed developments, a planning consultant will organise a Local Plan Inquiry and act as your representative on any meetings.
This is a specialist job and often, planning consultants have good relationships with local authority planners.
To find out when planning permission is required and the different types of planning permission which may be granted, check out the Government’s planning system information.
Contract administrator
A contract administrator – often called a CA - drafts and issues construction contracts to the professional team and ensures work complies with standards and any agreed terms.
Working on your behalf, the CA liaises between the construction company, developer and investors or other stakeholders, and is independent when making professional judgements.
The CA can be independent, or the role can be performed by the architect or project manager.
Flood risk and SuDS strategy consultant
A SuDS (Sustainable urban Drainage) or flood risk consultant, assesses the flood risk of a development.
With global warming and erratic seasonal weather increasing the risk of flooding in developments built around coastal resorts, on flood plains and near waterways, the role of a SuDS consultant is growing in importance.
A SuDs or flood risk consultant will compile a report for you, if requested by your local authority planning committee.
Transport consultant
Transport consultants work with planning consultants, advising developers how their projects impact local transport policies. Their task is to calculate how extra traffic generated by a development might interfere with traffic flow in the neighbourhood.
For instance, a housing development may have to include off-road parking, while a commercial project may need a car park.
Transport consultants also apply for Change of Use certificates and other necessary approvals before a development goes ahead.
Commercial space strategist
A commercial space strategist assesses how much of a development is given over to retailers, office space or other commercial uses, and will compare market rates for similar properties, helping you come up with a pricing strategy.
This specialist will also ensure any lease matches standard legal practice and any formal applications needed to meet the terms of planning permission are lodged with your local authority.
Interior designer
Interior designers showcase a finished development by dressing the inside space to appeal to potential buyers or tenants.
Sometimes interior designers are called in before work starts, to help with spatial awareness and to advise on things like lighting. They should be able to match the finish to your end user demographic.
As is the case with other roles, and in the absence of recommendations, look for an interior designer with experience in similar projects, someone who is a good communicator and can provide details of previous clients for you to speak to.
Landscape consultant
Making the surrounding land pleasing to the eye is the landscape consultant’s job.
A landscape consultant should add gloss to you, the developer’s vision, and blend the architect’s design seamlessly into the neighbourhood.
Landscape consultants also handle Environmental Impact Assessments and liaise with planners over the project’s impact on the local area. If the project is large enough, the landscape consultant may also be asked to represent you at any public inquiry.
Development finance platform
Brickflow is the UK’s first comparison site for development finance and bridging loans, enabling you to:
- Showcase your experience/projects and check the viability of sites online before going to see them
- Apply for funds via your broker (or a broker recommended by Brickflow)
- Compare estimates from compatible lenders (ranked by loan size and price, improving returns on capital employed)
- Shortlist up to five lenders and ask them to bid on your project
- Select the best loan terms and proceed to credit approval and completion
Brickflow delivers estimated loan sizes and pricing from around 80 lenders in two minutes.
Borrowers then can complete one online application for a decision in principle from up to 5x lenders in just 20 minutes. The platform instantly selects lenders likely to make a loan offer, resulting in a 90+% loan conversion rate.
By adding Brickflow’s specialist property finance platform to your team, you’ll be giving your development project a solid foundation for success. And by saving time and money, you’re giving your dream team the head-start it needs.
Property development team FAQs
The list of experts to pull into your property development dream team is almost endless and it may not always be up to you who you should call on.
Local planners sometimes call for reams of reports to scrutinise a development plan and paying for them adds to the cost of the project.
Sometimes, defining responsibilities between two consultants carrying out similar jobs is difficult, but here are some answers to the most asked questions about the topic.
Who ends up responsible if something goes wrong?
The developer holds ultimate responsibility if something goes wrong with the project, but this can be diluted with carefully worded contracts and job descriptions for anyone working on the development.
Consultants should have professional liability cover in case any work they are responsible for, fails.
What usually leads to a public inquiry?
The local authority will set up a public inquiry if your development receives too many objections.
Who is responsible for risk management on a development?
This will usually come under the project manager’s role.
Do consultants charge by hour or on the project size?
It depends on your contract; some charge hourly, some prefer a fixed rate and others base their costs on a time basis.
When should you arrange your finance?
As with most things in life, the more prepared you are, the less mistakes you’ll make. Some developers make the mistake of trying to arrange their funding after a site offer is accepted.
However when doing this, you’ll be making an assumption on the deposit size and lending costs, which means you could end up overpaying for your site. Similarly if there’s a deposit shortfall, it can often be expensive to plug.
To meet this shortfall, you’ll either have to raise the funds from investors, divert them from current projects or forgo the opportunity of developing future sites.
If lending costs are greater than you forecast, this means less profit. And if you’ve already agreed to the land price, you have no choice but to renegotiate or swallow the loss (caused by bad planning!).
This is easily avoided by getting a lender decision in principle - it takes 20 minutes on the Brickflow platform, and our Deal Forum process provides the greatest chance of the best outcome.
For more information on securing a peak debt facility, or development finance and bridging loans in general, please call us on 020 4525 6764 or email info@brickflow.com.
Brickflow is designed to be used by experienced finance & property professionals and property developers using Limited Companies or Incorporated Partnerships, to source and apply for development finance loans.
Brickflow is not an advisory business and does not give advice. It can deal with purely factual inquiries and provide information but it will not give an opinion or recommendation in any circumstances.
Property development carries risk, including variables beyond the developer’s control. A property development loan is debt and should be procured with caution.
Brickflow does not provide personal mortgages, but your home and other assets are at risk if you provide a personal guarantee for a corporate loan.