An Introduction to
Residential Property Development

The Basics – for new entrants and support staff at a time of market uncertainty

Chair

Andrew Leahy
Managing Director
Bespoke Property
Group Ltd

Speakers

Jim Bailey
Director
Development Land & Planning Consultants
Professor

Michael Ball
Department of Real Estate and Planning
University of Reading

Tim Craine
Managing Director
London Development Research

Nigel Dubben
Senior Lecturer, School of Surveying
Kingston University

Terry Fleet
Partner
Nabarro Nathanson

Jack Goulde FRICS
Chartered Surveyor

Stephen Jennings
Director of Residential Developments
DTZ Debenham Tie Leung

Brian Rubins
Managing Director
Southern Funding Limited

Matt Sharman
Associate Partner
Cluttons LLP

 

Programme

UNDERSTANDING RESIDENTIAL DEVELOPMENT CYCLES AND HOW NOT TO GET CAUGHT DOING THE WRONG THING AT THE WRONG TIME
• How to value the UK housing market
- A simple model of the UK residential market
- What are the key drivers of house prices?
• Why do property cycles happen?
- Fear and greed
- The trouble with bubbles
• Where are we now?
- In relation to historical trends
- Déjà vu?
• Where are we heading?
- Can a crash be averted?
- If not, what will happen?
• How will we get there?
- What are the key triggers?
• Implications for property development

THE ART OF FINDING A SITE
• Land availability - public and private
• Developable and undevelopable land
• Sites in multi-ownership
• Desk-top studies
• Fringe sites
• Preparing the ground for a planning application
• Lobbying and publicity campaigns
• The possible effect of the Planning and Compulsory Purchase Act 2004 and proposed development taxes on site-purchase
• Case studies - Barton Farm, Winchester; Dibden Bay, Hampshire

THE ART OF WINNING PLANNING CONSENT
• Planning a strategy to achieve consent
• Pre-application negotiations – who to see and when
• Planning application and supporting documents
• Public relations – community involvement
• Lobbying Councillors – when lobbying works
• Planning gain – how to use it to influence the decision
• Planning committees – the art of presenting one’s case
• Planning Appeals – type of appeal and tactics

THE ART OF ACQUIRING (ACQUIRING DEVELOPMENT RIGHTS OVER) THE LAND: UNDERSTANDING THE LANDOWNER’S POSITION AND ACTIONS
• Who am I?
• What have I got?
• Why should I sell?
• Why should I sell now?
• Why should I sell to you?
• What are my worries?
• How can I protect myself from you, the developer?

NEGOTIATING WITH LANDOWNERS AND CLOSING THE DEAL
• Understanding the landowner's objectives and identifying the optimum basis of disposal
• The process of site appraisal and analysis of the relevant factors
• Formulation of an offer – presentation and vital information required
• Agreement of Heads of Terms and pre-exchange contractual negotiations
• Satisfaction of conditions following exchange and communication required with the landowner
• Completing the deal and payment of purchase price
• Common mistakes and key ingredients to ensure success

FINANCING THE RESIDENTIAL DEVELOPMENT I – OPTIONS FOR SUBSTANTIAL, ESTABLISHED DEVELOPERS
• Stretched senior debt – reducing the cost of borrowing
• Mezzanine and equity finance – access, structures and cost
• Joint ventures – on and off balance sheet
• Recent cost-effective arrangements

FINANCING RESIDENTIAL DEVELOPMENT II – WHAT IS AVAILABLE FOR NEW ENTRANTS AND SMALLER DEVELOPERS?
• Who will lend?
• How much?
• On what terms?
• Clearing banks and specialist lenders
• Mezzanine loans
• Joint ventures
• Managing cash flow
• Recent cost effective arrangements

PRE-DESIGN, DESIGN, CONSTRUCTION AND THE CONSTRUCTION CONTRACT: GETTING IT RIGHT
• Who does what?
• The client’s role in successful development and risk reduction
• The pre-site plan
• Dealing with the neighbours
• Management once on site
• What happens after practical completion
• Alternative structures: traditional, design and build, partnering, mix and match
• Cost control
• Monitoring and controlling progress
• Dispute resolution
• Defining completion
• The involvement of funders and pre-let occupiers
• Health and safety issues
• Satisfying building regulators

WHAT ROLE FOR, WHAT PAYMENT TO, THE AGENT
• What do agents do?
• Assessing land availability
• Development appraisal and project viability studies
• The sale process
- Private treaty
- Tender
- Auction
• Pre-contract sales advice: what nature, type and specification of development is required to maximise profit?

THE ART OF MARKETING AND MAKING SALES: THE SALES AND AFTER-SALES PROCESS
• How to sell the development most effectively
• The various marketing schemes available
• How to gauge a rising and falling market and how to react to them
• How to achieve the speediest contracts and completions
• How to deal with ‘after-sales’ in an appropriate and customer service related manner

THE RISKS AND OPPORTUNITIES IN THE CURRENT MARKET
• The competition for development land: a ‘five forces’ model
• 1995 versus 2000 versus 2005
• The market place in 2005
• The specific risks facing those buying land in 2005
• Where, then, are the opportunities?
• Strategies to exploit the opportunities

DEVELOPING BLOCKS OF FLATS AND DEVELOPING HOUSES ARE DIFFERENT BUSINESSES - UNDERSTANDING THE DIFFERENCES AND WHAT TO DO ABOUT THEM
• Density considerations
• Height and amenity space considerations
• Difference in building cost
• Implications for funding marketing
• Management techniques for the future