Our Development Monitoring Director, Jonathan Witter, shares his top 10 tips for SME housebuilders.
Jonathan Witter MRICS, is the Development Monitoring Director at Assetz Capital.
Jonathan is a Chartered Surveyor with over 25 years’ experience. At Assetz Capital his focus is to advise on development monitoring, development finance, planning, and valuations on a national level.
In this short article Jonathan Witter shares his 10 essential tips to ensure that your next project runs as smoothly as possible.
SME housebuilders face unique challenges in the construction industry.
By following these essential tips, you can enhance your chances of success and ensure smooth project execution.
1. Pre-Commencement Planning Conditions
Before acquiring a site with planning permission, ensure you fully understand all pre-commencement planning conditions. Overlooking these requirements can lead to unexpected costs and project delays.
2. Plan an Exit Strategy
Develop a clear exit strategy from the outset. Will you sell to local buyers, showcase properties at exhibitions, build to let & refinance or sell off-plan to investors? A realistic approach, rather than relying on hope, is key to securing a profitable outcome.
3. Establish Your View of the Market
Be realistic about current market conditions. Analyse both sales and rental markets to determine demand, pricing, and potential challenges that may impact your project’s success.
4. Control Construction Costs
Seek professional advice from a Quantity Surveyor (QS) to develop an accurate cost profile for your scheme early on. Finalise design and fit-out details to avoid unforeseen costs during the project. Carefully consider contingency planning and account for ongoing cost inflation in your financial appraisals. Work closely with architect and principal contractor to find practical and economic solutions to potentially expensive design issues. It is also important to be live to Building Regulations requirements and the latest changes e.g. requirements of the Building Safety Act 2022 for high risk buildings etc.
5. Manage Utility Connections
Underestimating the cost and time required for utility connections can lead to project delays and increased financing costs. Engage with service providers early to ensure a smooth installation process and avoid setbacks that could impact your completion timeline.
6. Assess Ground Conditions
Groundworks carry significant development risks. Conduct thorough due diligence to assess drainage requirements, utility connections, contamination, and environmental issues. Understand fully the previous use of the site, history including potential contaminating industrial uses or mining etc will be essential. Addressing these early on can prevent costly surprises during construction.
7. Address Party Wall Issues
Ignoring party wall and boundary responsibilities can lead to costly disputes and delays. Seek professional advice from an RICS party wall surveyor early to mitigate potential conflicts and ensure compliance with legal requirements.
8. Choose the Right Procurement Route
Clearly define your procurement strategy from the outset. Whether you opt for design and build, traditional contracting, or construction management, all responsibilities must be clearly defined, documented to prevent disputes and misunderstandings later. Tendering to the project and letting the contract to an experienced and reliable contractor may save money over the full term of the project rather than simply going for the cheapest contractor.
9. Build Strong Relationships
Maintaining good relationships with all stakeholders—including local authority planners, building control inspectors, neighbouring property owners, estate agents, finance providers, QSs, and other professionals—can facilitate smoother project execution and problem resolution.
10. Secure Reliable Finance
Partnering with an experienced development finance, like Assetz Capital, lender can be highly beneficial. Not only will they offer tailored financing solutions, but their understanding of construction and development processes can provide crucial support in case of project issues. Building a long-term relationship with a lender can also enhance future business opportunities.
By combining these strategies, SME housebuilders can navigate the complexities of the industry, mitigate risks, and achieve sustainable success in the competitive housing market. The ongoing burgeoning demand for housing in the UK means that opportunities are to be found in most sub-markets.
If you have a project that needs financing, then why not call our New Business Team on 0800 470 0430.
Alternatively, email them at newbusiness@assetzcapital.co.uk.
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