How cautious do property developers need to be during uncertain times?

In times of uncertainty, it often feels safe to take a step back from any major decisions such as selling your home or investing in property.

Should property developers slow down in uncertain time?

In times of uncertainty, it often feels safe to take a step back from any major decisions such as selling your home or investing in property.

However, further investigation reveals that times of political and economic uncertainty do not always necessarily make terrible times for achieving a profit through development.

Want to get into property developing or need a fast secure loan to get you started?

Contact Hunter Finance for a property development loan

Why is now a good time to get into property?

An active market with potential for growth

Although COVID-19 has unarguably had an unprecedented impact on all industries – in the UK and globally – sales data reveals that the housing market still shows healthy signs of growth and stability.

Furthermore, the introduction of government incentives including; reduced rates of stamp duty land tax, reduced interest rates and first-time buyers’ discount scheme encourages buyers who may be a little cautious and helps to keep the market healthy.

Generally, reduced housing prices usually encourages more activity on the property market, which in effect will mean that developers have a larger availability of potential buyers.

Property is a long-term investment

Property is one of the most lucrative options when you are seeking ROI (Return on Investment).

Although most of our clients are working with buy-to-sell projects, (this means you can pay the majority of your loan back immediately after selling then retain the remaining profit) you may want to take advantage of this current moment to purchase land for other purposes, like property development.

Cheap land

The GDV is calculated to give an estimated figure of what the property will be worth once development is complete.The decreasing prices of land in the UK as a result of the pandemic works in favour of developers.

This is because they can get higher-quality land for lower prices.

Additionally, if fewer people are inclined to invest in these times, there will be less competition.

Therefore it will be easier for you to secure land.

There might be less potential developers competing for land compared to before lockdown, or if the pandemic did not occur.

Read more:

How hard is it hard to get approved for a loan to buy land?

Selling land VS developing on it

Valuing land with development potential

The fundamentals of a quality project remain unchanged.

Finding the right location:

When choosing where to develop a property, you want to be sure that the area is a quality location. You may ask yourself questions including:

  1. Will this location attract buyers?
  2. Will you be able to get planning permission?
  3. How have similar properties sold nearby?
  4. How easy is the land to build on?
  5. What is the current demand for the type of property you are building?

Securing funding:

The rates on development deals are currently incredibly low.

Additionally, construction and material costs have also dropped, and lenders may be more likely to give out loans if their business has slowed down in the past few months.

Deciding the right financier for your project is essential, and knowing you have strong support and flexible finance options should be a priority when choosing your funding source.

At Hunter Finance we prioritise; fast responses, quick results, optimal customer service and shared skills and expertise.

Read more about our previous successes here.

Additionally, if you would like to learn more about the costs involved in building a house we can offer advice on budget planning and sourcing contractors.

Get in contact today

Start making confident decisions about your dream projects today, and let Hunter Finance help you bring your goals to reality!

Click here or get in contact on 01825 749721.


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