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EssexFTB

Some Advice Please

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Hi there

Was just seeking some advice,

I will shortly recieve half an acre of land in Essex in an urban area due to an inheritance windfall. My cousin and i wish to build four, 3 bed houses on this land.

We have acquired outlined pp from the council and are now making way to start the buildings.

My cousin and i have hit a problem though. He wants to sell off the 4 houses as soon as they are built, pay back the money borrowed and run, whereas i would like to rent out the properties and pay them off while i go off travelling!!!

In the current state of the market what would you guys do, sell asap or ride the storm??

Any advice would be greatly appreciated.

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Get planning approved...

Flog it off with the permission...

I am a developer... www.uboratowers.com

I am also very Bearish about UK market

This is the wrong kind of forum for development.

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If you were a Bear you would probably sell the land on and let someone else do the developing or at the very least agree with your cousin.

Your right, but all the bears on here seem to have fingers in other pies. Are you a housing market bear and a stockmarket Bull?? Or are you a bear because your forced to be a bear at least until the crash when you buy and then become a bull again!!

Bull or bear i dont know, i would just like to do whatever is best for myself and family!!!

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After building the houses, you should sell all the properties at cost to local FTB's who are currently priced out. :rolleyes:

YEah, imagine that. The EA Will need riot gear!! The army of young FTB in my area is outrageous!!!!

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The decision to hold or sell is dependent on your view of the market and the opportunity cost of capital.

Your profile says you are a "Bear", so that should give you an indication!

The simplest calculation you should make is based on the rental yield (say 4%) + anticipated average capital growth over the period you want to hold. If you really are a bear, and the hold period is, say, 3 years and you expect the market to decline in value by 30% over those three years, your total return is:

4 - 10 = -6% per annum.

Contrast this with savings rates of +6%, and your decision is quite easy.

Clearly there are other considerations, management costs of the letting, tax (offset interest on BTL) and so on.

Personally I would sell the land with permission.

If it helps, I am a Property Banker and Surveyor.

The above is not formal advice, you make your own decisions.

Regards,

Loafer

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Reasons?

Profit is profit, if you go galavanting around the world, you will find it difficult to sell if a crash occurs.

Could always hedge your bets and sell 3 and rent 1?

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I'm a solicitor specialising in residential development. IMHO you should sell the site with the benefit of planning permission to a developer and let them worry about delays, cost overruns, falling market etc etc.

You don't say whether you need to borry money to finance the build costs. If you do and you have no experience in property development then it sounds like a risk not worth taking in the current climate

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I'm a solicitor specialising in residential development. IMHO you should sell the site with the benefit of planning permission to a developer and let them worry about delays, cost overruns, falling market etc etc.

Yep, stupid money being paid at the moment with lots of risk.

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I'm a solicitor specialising in residential development. IMHO you should sell the site with the benefit of planning permission to a developer and let them worry about delays, cost overruns, falling market etc etc.

You don't say whether you need to borry money to finance the build costs. If you do and you have no experience in property development then it sounds like a risk not worth taking in the current climate

Very much agreed.

I have spent my life in construction; building things is more work than it looks.

By any reasonable analyis the market is way over-priced, if it is going off the boil you may only have a few months before the autumn and it could be a lot harder to sell.

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before you do anything check that there is no requirement under the planning permission for any affordable housing provision. Some councils now require that up to 35% of finished plots where the development has as little as 3 or more houses are offered to a housing association in which case you will only recieve about 50k for the offered plot.

In other words you would build 4 and probably have to sell one for less than cost price.

Often with small plots it is better to build just 2 plots.

My advice would be to take further advice from an architect or planning consultant first before doing anything. But this info should be on the outline planning info.

I'm an architect btw.

Edited by soho_blue

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