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Property development guide

 Property Development

Developing a property or a site for Planning Gain is one of the quickest ways for instant added value and profits. But it is not easy. You often have to risk your own capital, employ expensive professionals and risk being refused planning permission with all the abortive costs.


Is The Property Development Boom Coming To An End?

In the UK there has been a real property development boom in recent years, thanks largely to a proliferation of property development programs on TV such as 'Property Ladder' which often shows even the most incompetent people making thousands of pounds profit every week. However, is this boom now coming to an end?

There's no question that these programs have had a big impact on the number of people taking up property development, but it should be pointed out that a lot of these programs appeared on our screens at the same time as house prices were soaring.

Indeed this is the main reason why so many people, however inexperienced, have made significant amounts of money from property development in recent years. With prices rising over 10% a year, you don't need to be a hotshot property developer to make money from buying a property and doing it up. Any fool can do it, as demonstrated most weeks on 'Property Ladder'.

Every week you see these amateur developers make lots of mistakes, ignore Sarah Beeny's advice and still come out with a profit, and these people suddenly think they're cut out to be property developers. The reality, however, is that in most cases they only made money by the overall property market going up, and in a stagnant or falling market they would have actually lost money.

These times could now be coming to an end with the UK property market now slowing down and property prices falling in most areas. The days of the easy money are gone. You can still make good money from property developing but you're going to have to pay close attention to your buying price and keep costs to an absolute minimum, making few mistakes along the way. This market will certainly separate the professional developers from the amateurs.

With few buyers around, it will also be a lot harder, even for professional developers, to sell their property at the end of the project and realise a profit, which is another potential problem for developers. It may be the case that the wealthier people who can afford to hold onto a property and rent it out after completion will do better than the smaller developer who develops one or two properties at a time and needs to sell to move onto the next project.

So to answer the original question, it does appear that the property development boom could well be coming to an end because with prices stagnating and falling in a lot of places, only the most skilled property developers will survive.

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