"New developments are not always welcomed by the local community, which is why community engagement should be factored into the planning phase to mitigate opposition from local residents."
- Johnny Leadsom - J3 Advisory
In property development, there are many complexities to consider when planning a new project. From market research to assessing the environmental impact and regulatory compliance, thorough planning and due diligence are vital to ensure a smooth and successful project.
Johnny Leadsom breaks down everything property developers should consider when planning a new property development.
Market analysis
A thorough understanding of the market is the essential first step when planning a new development project. It is imperative to understand the complex market and consumer demand, which will help to inform decisions and strategy throughout the wider planning process. Conduct research into the housing market in general, the financial market, the local housing market, and wider economic and political factors.
Selecting the right location
Location is key when it comes to planning a development project. It is essential to invest in an area that has not only high demand but also possesses the potential for strong growth and an increase in value over time.
The local infrastructure, amenities, and transport links should also be a significant deciding factor when selecting your location. Take into consideration the key selling points of an area to prospective tenants and buyers.
Environmental impact assessment
The environmental impact of a property development project is a key consideration and is a factor that local councils will consider when granting planning permission for the development. Local authorities will often require that the project comply with its own sustainability agenda before permission is granted.
New development projects will be required to take preventative measures to mitigate the amount of environmental damage caused. Sustainable practices may include recycling, sustainable waste management, water conservation, and the incorporation of green technologies.
Financial planning & feasibility modelling
Meticulous financial planning and feasibility modelling are required to assess the development in the planning stage. Accurately map out the financial plan for the development and create a structured budget, ensuring all costs, additional fees, and permits are budgeted against.
Selecting your construction team
When selecting your contractors to undertake the construction of your development, picking the right team of professionals is essential. This is why it’s often worthwhile to do lots of thorough research during the tendering process. Take the time to assess the portfolios and the previous projects completed by potential construction companies.
This is where it is vital to compare their previous projects with your own, to assess whether they meet the demands and requirements of your development. Consider asking potential candidates to provide references for previous projects that they have completed.
Also, ensure that you are checking that they possess the correct qualifications and licences to complete the work you require. Compare costs between different construction companies, and always ensure you are provided with the correct quotations that contain an in-depth breakdown of the associated costs and charges for the services.
Risk assessments
Risk assessments and planning are essential to mitigate risks for the new development. This doesn’t just apply to onsite safety and adhering to regulatory standards and compliance, but also wider risks and changing circumstances that could delay the project and cause financial loss.
Contingency planning for these types of situations is particularly important during the planning stage of a new development. Examples include planning with problems due to weather, environmental issues, cost overrunning, construction delays, and design errors.
Structural warranties, also known as new build warranties, provide financial protection against defects in new constructions, for up to 10 or 12 years post-completion. These warranties are crucial for securing financing as most lenders require them before issuing mortgages on new builds, and they serve as a significant selling point for potential buyers by offering peace of mind that any major defects will be addressed.
Developers should ensure that the warranty provider is reputable and backed by A-rated underwriters to ensure the reliability of the cover provided. Integrating structural warranties into the risk assessment process is vital as they act as a risk mitigation strategy, safeguarding against unforeseen structural failures that could have significant financial and safety implications.
Community engagement planning
New developments are not always welcomed by the local community, which is why community engagement should be factored into the planning phase to mitigate opposition from local residents.
Consult with the local community, this can be done by running workshops and forums, and keeping them informed of ongoing developments via online platforms and social media.
Sales & marketing
A successful development project relies heavily on a comprehensive sales and marketing strategy to create consumer interest and to get your development in front of the right audience.
In an extremely competitive market, a strong brand and compelling marketing messages are required to generate interest in the properties amongst the target market.
Understand your audience and the key demographics, and tailor your strategy to the needs and desires of the audience. Sales and marketing costs should also be accounted for and budgeted for during the financial planning and feasibility modelling stage.
