Phew – the new government aren’t hanging about! They’ve certainly got stuck right in and are making some big changes that are going to affect anyone involved in the property industry.

First came the abolition of Hips packs last month, then last week they announced the reclassification of back gardens.

Now the Housing Minister Grant Shapps is to scrap the residential property landlord register planned by the previous government (you can read about it here).

So far, the move has been widely welcomed by the industry. And I can see why! I think that the last government went too far with their plans for the landlord register. Ultimately, it would have led to more red tape, more complexity and would have been costly for the housing sector.

The move to reduce bureaucracy and red tape is a good one. I think it’s a great way to build up confidence in the property industry and encourage further investment in the sector.

However, saying that, I think that ignoring the regulation of the private rental sector is a mistake. Currently, there are no mandatory controls of letting agents. This can lead to unethical and unprofessional agents giving the industry a bad name.

It seems the Government hasn’t decided how, when, or if it will introduce some form of regulation of letting agents. I think more self-regulation would be the preferred option and this is something that they do seem to be considering. Let’s hope they don’t leave the decision too long.

Yesterday, the new Communities Minister Greg Clark announced that he intends to change the planning classification of gardens to tackle the so-called problem of ‘garden grabbing’. As a result, gardens will no longer be considered “Brownfield land”  (i.e. land that has been previously developed).

This is something that has been on Mr Clark’s agenda for sometime. In fact, the BBC covered a story way back in 2006 when he tried to introduce a Protect Private Gardens Bill.  You can read about it here.

It’s worth noting that Mr Clark is the MP for Tunbridge Wells. As a much sought after area of the South East, Tunbridge Wells is an area where land is at a premium and where housing demand is historically strong… so is  one of the rare areas where garden grabbing has been a bit of a problem… however how much of a problem is it in the rest of the UK?

Is “garden grabbing” really the problem it’s made out to be?

In my recent blog post on the topic of garden grabbing, I mentioned that planners already have powers to stop this practice. But the fact remains, that despite media and government spin, garden grabbing isn’t a major problem for much of the UK.

How do I know?

Well, let’s just take a look at the recent independent research that the previous Government commissioned to investigate the issue of inappropriate developments within back gardens.

The review found that: “Of the 127 [councils] who responded, less than half (50 councils) considered it an issue in their areas. Of those who reported a problem, only 5 per cent (7 councils) had specific, local policies in place.”

So how will the new legislation affect us developers and land finders?

Regardless of whether garden grabbing is a problem or not (even though over 50% of councils don’t actually think that it is!), it appears that gardens have now been reclassified in the Government’s new Planning Policy Statement 3 (PPS3) which you can read here.

So what kind of effect will this have on us developers and land finders?

Well, overall, pretty limited I would say. Though I think the impact will differ around the country. For example, earlier today I looked back at the deals I’ve done in recent years… and, actually, I can only find one such ‘garden land’ deal that would’ve been affected by this reclassification.

All my other deals have been Brownfield sites used for other purposes, so as such, they wouldn’t have been affected by the policy change.  These included an MOT garage and petrol station, a tyre and exhaust garage, a public house, a farm house and barns, a former Church, the site of a lodge that had been land filled, a haulage depot, a van sales yard… to name but a few!

All of these were sourced off market and none of them were gardens.

What about my current ‘garden site’ deals?

Having said that, I have just agreed a price on three garden sites and am ready to submit planning on one of them this week.  So will the new legislation affect my deals? Probably not…

The fact is, there are many different kinds of “garden-type developments”. Some will be more suitable than others, and ultimately, as with all developments, it’s going to depend on what you propose to build on the land… and how it sits within the specific characteristics of that locality.

So I will still continue to look at these opportunities for now, because I think that even when the policy does change it will be much more applicable to certain geographical areas – such as the South East – and also specific areas within each town.

For example, in my hometown of Bolton, it is well known that Lostock and Heaton are the most affluent wards where demand for large houses has been most keen for many years.

In these areas, the local planners have already severely restricted the practice of developing in gardens – as well as the demolition of a large property sitting in a big plot and replacing it with a higher density development.  So I can see the change in policy will only help to “shore up” the council’s defence against the practice.

However, in other areas of Bolton I would expect less resistance, providing that the scheme was in-keeping with planning regulations and in-keeping with the local neighbourhood…

The main thing to ask yourself with any development is this: Does it sit well within its surroundings?

Let me show you an example…

Below is a “back garden” type of site that I looked at recently. The fact is, these have always been tricky when it comes to getting planning…

I wanted to demolish the existing pair of large semi detached houses in the centre of an acre plot.  However, even with existing planning laws, the planners where able to resist the scheme as they argued it wasn’t in keeping with the design policies of their Unitary Development Plan (UDP).

The planners were looking at the proposal in its locality, not the wider area. As annoying as it is, to some degree I could see their point!

Now compare that to the plot below. This is more of an infill garden plot…

Here, we have a pair of semi-detached houses. One of them has a large garden that is over grown and not used.  Here I have done a deal with the owner and I intend to submit planning for a single detached house.  This opportunity is a natural infill and won’t alter the character of the area.

So as you can see, these are two completely different examples of garden-type opportunities that I believe will be considered differently by the planners.  Both would be profitable if acquired at the right price.

Below is another example that “makes sense” from a planning point of view as it is a natural infill.

So how can we protect ourselves against a sudden change in policy?

I’m not sure about how long it will take for the policy change to take place, though it appears to be immediately enforceable if local councils are minded to do so. However, when considering your developments it’s crucial that you carry out thorough due diligence as usual.

To be on the safe side, it might be wise to stick to more appropriate, less controversial garden types schemes like the ones shown above.  Stay away from back land type development, as they are often fraught with difficulties.  Also, make sure you check your proposals with the local planning office before delving too deep into a deal!  You may have to look at their policy more carefully at the outset.

Don’t forget, of course, that there are thousands of other Brownfield opportunities out there too! You most certainly don’t need to stick to garden sites to make money in this game. Though they are (or have been) a great place to start.

We will just have to wait and see how the policy emerges. However, I suspect that it will be locally driven so will vary considerably around the UK. Plus, much will depend on the development scheme that you are proposing – just as it does now.

In short, always ensure that your proposed developments are in-keeping with both the neighbourhood and the local planning regulations. In this respect, nothing much has changed. There are still plenty of prime opportunities out there just waiting to be discovered…

And if you find that “garden grabbing” becomes more restricted in your area, then it can only serve to increase demand yet further for other types of Brownfield site, leading to lucrative opportunities for land finders and developers alike!

After the recent slump in property prices, headline figures suggest that house values are once again on the up. The latest figures from Nationwide reported that house prices rose by 1% in April, and have increased by over 10% in the past 12 months, while the Halifax has stated that prices are 7% higher than last year.

Plus, the Royal Institution of Chartered Surveyors has predicted that the housing market will experience a post-election boost with housing prices increasing over the summer.

Sounds good on the surface, right?

Well you’d certainly think so! However, in my experience, lenders seem reluctant to pass on the good cheer. Low mortgage valuations are still proving to be a big problem for many people.

So why are low valuations such a problem?

When assessing for finance, some mortgage lenders have been valuing properties by up to 20% below market value.  So say you’ve found a great BTL opportunity on the market for £200,000.  The lender then values it at 160K. This leaves you having to find a bigger deposit, negotiating a lower price… or simply missing out on the opportunity all together.  And, it’s not just BTL investors who are being hit. The problem also affects private home-buyers and especially those trying to remortgage…

So what can you do about a low valuation?

Firstly, make sure that the lender carries out a physical inspection of your property, rather than simply relying on a “desktop” appraisal. If they still come back to you with a low valuation, you can try appealing against the decision and show your lender evidence of a few similar properties in the area that have sold at the right price. However, this isn’t always easy… in a market where few properties are changing hands, you may struggle to gather enough evidence.

That doesn’t mean you have to miss out though…

If you’ve sourced a great BTL opportunity that’s been down-valued in this way, and you can’t persuade the valuer to change his opinion then it really comes down to one thing:

Do you think it’s a good deal or not?

At the end of the day, if your due diligence has shown that the property is good at the price, with great potential, then you may have to be brave and trust your judgement. That’s assuming you have the capital to invest to cover the extra deposit shortfall.

These are far from normal times and 12 months from now, with more confidence in the market, the same deal could be seen in a much different light.

Bear in mind that these low valuations are being given by some over cautious lenders to provide them with an extra buffer of protection on the deal. So, I prefer to judge each property on its own merits and ask myself whether it’s a good deal or not.  If it is, I’m likely to be happy with it, regardless of what a surveyor may think at that point in time. Let’s face it, BTL is a long-term investment strategy so I’m more interested in the value of the property in a decade or so’s time, not what it’s worth at the bottom of the property crash.

So, if after carrying out your due diligence you decide to press ahead, you can take the mortgage offered by the lender and make up the shortfall yourself or through mezzanine finance.

What other options are available?

Obviously, there are lots of lenders out there – even in the current market – so it can pay to shop around to see if you can get a better valuation – and finance deal – elsewhere.

A lot of investors rely on a development finance broker who knows which lenders are less likely to undervalue. They should have access to a wide network of specialist finance lenders and financiers and be able to trawl through all the relevant products to find you the very best deal.

A good broker will not only save you time and effort but – perhaps even more importantly – they’ll also be able to provide you with good value for money, getting you a deal that will pay for their services many times over.

Shameless plug altert!

LandLounge.com has just launched a brand new development finance service proving access to a range of products specially tailored to the needs of developers and BTL investors, such mezzanine finance and BTL mortgages. They’re also offering some exclusive products not available elsewhere. For full details visit www.LandLounge.com.

So remember, just because some lenders are providing low valuations, doesn’t mean you have to put up with it or miss out on profitable BTL opportunities – you still have plenty of options!

It’s not very often that you’ll catch me agreeing with Prince Charles’s views on architecture… however, listening to his address to councillors and planners in Edinburgh recently, he echoed something I’ve believed for many years.

Essentially, he called on housing developers to consider whether they would want to set up home in the properties they build.

This a basic rule of thumb I’ve always applied to my own developments, and encourage other developers to carefully consider.

“Would you want to live there?”

When you think about it, it’s not a bad test on the quality of a proposed development.  After all, if the developer would want to live there, then it’s pretty reasonable to assume that other people will too.  If you apply this principal to your development schemes – and even your BTL properties – then you stand a much better chance of shifting the houses quickly when they come to market.

But it’s about more than just cash flow. Often, developers can lose sight of the fact that they are building so much more than housing developments or housing estates… they are actually contributing to, or even creating, communities.

That’s why taking a broader, more holistic, approach to developing, taking into consideration not only the bricks and mortar, but the surrounding neighbourhood environment and the socio-economic aspect of a development can result in something altogether more rewarding.

I’m constantly hammering home to my Developing Profits students the fact that good development planning is essential – it makes the development more appealing for everyone involved…

That means it’s good for the neighbourhood… and good for profits too!

Love of them or hate them, Home Information Packs (Hips) have finally been scrapped from today. In a decisive move to cut some of the “pointless red tape that is strangling the property market”, the Conservative-Lib Dem Government has opted to get rid of the controversial Hips all together.

Sellers will still have to provide an official energy efficiency assessment of their property, but this is a fairly cheap and simple document in comparison.

So what does this mean to sellers and buyers?

Widely criticised by those within the property industry from the outset, Hips were seen as little more than an annoying obstruction. Now, sellers will be able to get on with marketing their properties without having to shell out the extra costs for Hips. This will mean that, typically, a seller will save around £250 on marketing.

Plus, it’s thought that the move will encourage more sellers to put their homes on the market, as due to the additional, up-front expense of Hips, many were put off speculatively marketing their properties.

As for buyers… well, it’s unlikely to make a huge difference to them, as it’s believed that house hunters paid little attention to the documents anyway – and seeing as Hips were provided for them, it makes you wonder how worthwhile the entire exercise has been!

On a sad note…

The decision will mean that a number of companies will go out of business overnight and thousands of people that have trained to deliver Hips will lose their jobs.

Let’s hope that the failed Hips initiative will encourage ministers to take more considered decisions on housing policy in future. Perhaps next time they may even listen to the advice of the industry itself.

Over the years I must have spoken to many hundreds of buy-to-let investors. The vast majority of them own a small portfolio of properties and seem quite content to get by each month on a few hundred pounds of “positive cash flow”.

They boast to me about how many properties they own and the value of their portfolio… and seem to ignore the fact that, after finance and maintenance costs, they’re making very little regular income… if any!

Now don’t get me wrong. BTL is a fantastic investment strategy. But most people only get to enjoy the fruits of their labour many years down the line. Hopefully your portfolio will allow you to enjoy a long and carefree retirement… but what about today? Does your monthly BTL income really deliver the standard of living and financial freedom you deserve?

Well, what would you say if I offered you the opportunity to supplement your income by at least £50,000 per year? What if I also told you that, as a BTL investor, you already possess many of the skills required to generate an additional FIVE or SIX figure annual income? And what if I mentioned that you could generate this income around your existing commitments, relying on other people to do most of the “hard graft” on your behalf?

At this point you’re probably expecting me to introduce you to some new and far fetched “passive income generating system”… another one of those ridiculous get rich quick schemes. Well, you’d be wrong.

I’m talking about new build developing… Basically, securing some land and building something new on it.

“But what on earth do I know about property developing?… I’m not made of money you know!” I hear you cry.

Surprisingly, developing for profit is strikingly similar to BTL investing… just on a larger scale. You already possess many of the skills you will need to become a successful property developer.

Using the methods I’ve honed over the last decade, you don’t need ANY construction knowledge and, to get started, you needn’t invest any more capital than a typical BTL project.

You see, just like a BTL investor, the job of a property developer is really that of a facilitator. They source the opportunity, organise finance, structure the deal and concentrate on sales and marketing. We leave all the specialist tasks and “dirty work” to other people… solicitors, finance brokers, builders / construction companies etc etc.

One big advantage of new build developing is that there are no nasty surprises. You’re working with a blank canvass so once you’re out of the ground you know exactly what you are dealing with. Plus, I always negotiate a fixed price contract with a single main contractor so my developments are always delivered on time and on budget.

Despite completing many successful development projects, I honestly wouldn’t be able to tell you how to lay one brick on top of another. That said, it’s always useful to have a broad understanding of the construction process so that you’re able to manage it effectively, however this knowledge is easily learned. And to help you on your way, you may just find this free download useful…

Download your FREE beginners guide to property development!

If you’re interested in new build developing but don’t know where to begin, then you’ll find the FREE guide that’s available to download from my website a useful place to start. It’s an extract from my new course “Developing Profits: from beginner to pro, the ultimate guide to profitable new build developing”.

Download your FREE introduction to Developing Profits right now and discover:

• Exactly what new build developing is.
• Why it’s a great time to start learning developing skills right now.
• Why developing is relatively easy for you to do.
• How you can learn the inside knowledge and develop the necessary skills to generate life changing profits from one or two deals a year.
• How one small project can generate more profits than working full-time.
• Why you don’t actually need to know very much about construction to become a successful property developer.
• How you can leverage the skills of other property professionals to make substantial profits.
• Whether it’s possible to develop as a part-time hobby or a full-time career.
• A complete overview of the development process.

In this FREE download, I’ll show you exactly how you can furnish yourself with the knowledge, skills and confidence to move from novice developer right through to co-ordinating multi-million pound projects just like a pro.

Don’t miss out on the opportunity to leverage your existing skills to generate a life-changing regular income as a property developer. Download your free guide now!

Great news for land finders!

Google Earth has just made our land searches even easier by expanding it’s Street View service to a total of 96% of all roads, streets, avenues – and even lanes – right across the UK!

360-degree panoramic land finding – from home!

The service enables you to explore highly detailed, 360-degree panoramic images at street level. So, as anyone who’s read my Land Finder Fortunes report will know, this is really going to prove an invaluable asset to your land finding, enabling you to assess sites in great detail – all from the comfort of your own home!

Until now, the service was mainly available only in a handful of locations. Google introduced Street View in March 2009, initially concentrating the service on famous landmarks and city centres.

Nearly a quarter of a million miles of road now covered!

However, over the last year, the infamous Google camera cars have been out and about, taking snaps of everything from busy city streets to little lanes in the middle of nowhere. Now the increased coverage has been extended across an additional 210,000 miles of highly detailed street-level mapping.

As you may know, one of the main problems with Google Earth is that its images can be a few years out of date. However, the new Street View images will not only offer you fantastic panoramic views of plots you might be interested in but they will also be bang up-to-date!

Google Street View of a potential development site

Enhancing your desktop appraisals!

This has really enhanced the level of detail available to land finders. As a result, it should transform your ability to perform detailed desktop appraisals, and really assess which plots are likely to provide great development potential.

Best of all, it’s still free! So this should really give your land finding a massive boost… I know it has for me! So what are you waiting for… go and give it a try!

For further information visit: www.google.co.uk/help/maps/streetview/index.html

It’s always great to get some independent feedback on my land finding techniques. So I was absolutely thrilled to see that Julie Hanson from property portal www.justdoproperty.co.uk has just started a series of blog articles about my Land Finder Masterclass called: “Diary of a land finder virgin”.

Julie has recently signed up to my Land Finder Masterclass, and in her weekly blog posts, she will be sharing her thoughts and progress as she works her way through the comprehensive 8-week course.

You can see how she’s getting on and read all about her progress here.

Did you catch the recent news reports about the Government’s so-called “clampdown on garden grabbing”?

According to the press, garden grabbing – whereby developers build inappropriate developments within the back yards of existing houses – has become “a serious problem”. The Telegraph’s coverage is fairly typical of the way the mainstream press covered the story.

Someone reading the article could be forgiven for assuming that garden developments have effectively been banned. However, if you compare the news article with the official Government statement you’ll realise that nothing could be further from the truth.

But it’s worth looking at the facts of the story because behind the spin some interesting points have come to light…

“Not a problem in the majority of areas…”

It seems the Government commissioned independent research to investigate the issue of inappropriate developments within back gardens. The review’s findings are really interesting…

“Of the 127 [councils] who responded, less than half (50 councils) considered it an issue in their areas. Of those who reported a problem, only 5 per cent (7 councils) had specific, local policies in place.” It’s worth noting that none of the councils who responded asked for a blanket ban on back garden developments.

The Housing and Planning Minister John Healey admits: “it is good news that councils have told our independent experts that it is not a problem in the large majority of areas.”

So, despite what the press would have us believe, the Government isn’t advocating a ban on all garden developments. They’re merely reminding a minority of councils who have been a little lax, that they have the power to prevent inappropriate developments to be built in back gardens.

So what does this mean for land finders, self-builders and developers?

Successful property development relies on appropriate, carefully considered schemes that enhance a neighbourhood. I’ve never been in favour of inappropriate, oversized developments shoe-horned into tight back garden areas and welcome the Government’s efforts to tackle the issue in those few “hot spots” where it’s been allowed to become a problem.

To be honest, these sorts of development are often fraught with problems. I prefer to concentrate on “infill” developments – slotting new housing in between existing properties. It’s usually much easier to get infills through planning and they don’t tend to suffer from the same access issues.

Huge demand for UK developments

The fact is, there’s huge demand for additional housing (and therefore suitable development land) in the UK. The Government has set a target to build 3 million new homes by 2020 and, in the main, it’s down to the local authorities to allocate enough land to meet this ambitious goal.  Most local authorities see garden plots as a suitable and sustainable way of helping them achieve their targets. After all, most of the infrastructure required for a new development – such as roads, utilities and local amenities – are already in place.

It’s hardly surprising therefore that in some areas as much as 94 per cent of residential development is on gardens or other “occupied” land. The Government relies on the redevelopment of this land – known as “brownfield” land – to house the country’s growing population. To suggest that the practice of building on spare garden land could be banned is, frankly, ridiculous!

Due diligence…

So, if you’ve found a back garden with great development potential, none of this need put you off exploring its potential further. The new guidance doesn’t mean that all back garden developments are out of the question. It just means that the planners are less likely to let you get away with a really bad proposal.

As with all development schemes, it’s simply a case of performing your due diligence and checking with your local planners to gauge their reaction to your proposals.

But remember, there are lots of opportunities out there that don’t involve gardens at all! My most profitable deals have involved other types of brownfield sites… pubs, petrol stations, garages, farms. There are opportunities all around us, it just takes a keen eye to spot them!

Unless the Government is willing to release huge swathes of Greenfield or Greenbelt land – which is extremely unlikely – they must rely on industrious land finders and developers to identify alternative uses for existing brownfield sites. It’s the only way they’re going to meet their own targets and house the growing population.

So, as long as there’s a demand for houses there will be opportunities for those people “in-the-know” to make substantial profits from land. And if the press insist on labelling us “garden grabbers” then I guess it’s something we’ll just have to live with!

Well, life certainly has a strange way of dealing out the cards sometimes. As Forrest Gump famously said: “Life is like a box of chocolates… you never know what you’re gonna get!”

Before Christmas I was busy helping to broker one of the strangest deals of my career. As regular readers will know, before I was made bankrupt, I had built a considerable property portfolio worth over £10m at the time.

Unfortunately, due to my involvement with a failed music distribution company, I eventually watched the entire portfolio slip through my hands.

Well guess what?

I recently helped to broker a deal to buy back the majority of properties within the portfolio… the very same properties I bought several years ago! It was touch-and-go… but after a lot of negotiation we eventually managed to strike a deal to secure the houses from the administrator on behalf of a contact of mine. Who’d have thought it!?!

Not only that, I am now helping my colleague to split up the portfolio and sell on these fantastic buy-to-let houses at an amazing discount.

It’s a fantastic way to launch my new BMV property brokering service. Most of my former properties are available now at a fantastic and genuine 30% DISCOUNT and many of the houses are already tenanted!

Of course, I know each of these properties extremely well and can confirm that every one represents a fantastic deal for those on the look out for good BMV opportunities.

Inevitably, quite a few have been snapped up already and there’s been a huge amount of interest in the rest.

So if BMV properties are something you’re interested in, you’ll need to act quickly if you want to bag yourself an excellent bargain – deals like this won’t stay on the market for long!

To find out more, join my BMV Properties mailing list today.