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!

…a friend of mine told me that in the pub last Friday.  It’s something a client of his tells him time and again. Last time I looked, his client was worth £1.3 BILLION in the Sunday Times Rich List.  Apparently this pearl of wisdom is the cornerstone of his wealth creation strategy – and it’s obviously worked very well for him!

When you think about it, this nugget of information is the very reason that land has always been considered a solid investment. Yet, without a great deal of capital it’s always been considered difficult to buy land as an investment.

When you combine a rising population with a chronically slow and reactive planning system – together with the public mentality to new development of “not in my back yard” – you soon get a recipe for rising land values.

Development is so restricted in the UK, that when we do obtain planning, the difference in the land value is often immense. So while it’s perceived to be difficult to acquire land for investment without capital, the case for doing so is, and always will be, very strong.

Thankfully, for us mere mortals (not billionaires!), it is actually possible to acquire “control” of land for very little capital… if any!

How?

With the use of a little-known gem called an Option Agreement. In fact, an Option Agreement can enable you to control land for just one pound.  And crucially, while you have “control” of that land, you can increase its value by 200 times or more by obtaining planning permission to develop it.

For those of you who’ve been reading my blog, you’ll already know that this is something I’ve been doing successfully for some time now.  Due to the recession, I will be the first to admit that, until recently, my land deals took a backseat.

However, as we now seem to be coming out the other side, I’ve started actively searching for new opportunities once again.  As many of you know, I also help to run LandLounge.com – an internet-based land agency.  Here too, we’ve noticed much more activity in the last few months.  In fact, we’ve agreed two sales just this week.

Land investment is actually a great opportunity. It’s the ideal way to generate income for anyone that’s willing to learn the ropes – just like becoming a buy-to-let landlord.  If you’re willing to put in the effort and learn the methods of sourcing and appraising, it offers significant rewards.

We’re not talking rewards that pay £150 per month “positive cash flow”. No. We’re talking rewards that can clear your mortgage in one fell swoop.

For the more experienced, the rewards can be huge.  I brokered a deal recently that is yet to go through planning, but we’re told it will get the support of the Local Authority.  It’s a site that was purchased for just – wait for it – £5,000.

How much do you think this site will be worth after planning is granted?

100k? 200k?

At the beginning of the article, I said it’s possible to increase land value by 200 times or more by obtaining planning consent.  Well this deal was an exception.  This particular piece of land purchased for just £5,000 will be worth at least £8,000,000 after planning. Yes – EIGHT MILLION POUNDS.

Now admittedly, sites like this are rare and 20 years had passed between purchase and submission of planning application.  However, suppose it was you that bought the wasteland 20 years ago and were now sat on £8 million?

You don’t need deals like the above to make life-changing sums.  I always advise people to start small – perhaps look for single plots and work your way to bigger deals as your confidence and knowledge grows.

My ideal sites have been those up to two acres in size.  Sites like these are often overlooked by developers especially if they have existing buildings or uses that make them less obvious.  You will also find that there are deals-a-plenty right on very own your doorstep. It’s just a question of knowing where to look…

I recently described how I made £300k profit on a site in Bolton in just 9 months. I’ve completed lots of other planning gain deals such as a barn conversion that made £230,000 profit, a pub that made £80,000 profit and an old church that made £125,000 profit.

Basically, my point is this: You don’t need to be a billionaire to invest in land if you know how. But if, like me, you want to become one, then take on board our opening pearl of wisdom…

Buy land. They ain’t making any more of it!

Regular readers will already be familiar with my multi-faceted approach to property. In addition to run-of-the-mill buy-to-let investing, I generate life changing and regular income through site finding, new build developing, land trading, renovating and – more recently – by helping others to replicate my methods.

I’ve already described how I used my knowledge of the planning system to obtain permission to build my own home. If you remember, my wife and I had set our hearts on a one acre, semi-rural, ‘greenfield’ site. An independent planning consultant had told the owner of the land that he stood very little chance of achieving planning consent for any sort of development. As a result, I was able to purchase the site extremely cheaply.

Within a few months, armed with detailed planning permission to erect a 7,500 sq ft house, I could have sold the land to a developer and walked away with a quick profit of around £140,000.

Incredible isn’t it? The value of the land had increased by 140 GRAND, simply because it now benefited from planning permission for a spectacular luxury home.

If you’ve read my recent post A Tricky Question of Looking Beyond the Obvious you’ll know that, on that occasion, I decided not to sell the land and instead embarked on my first self build project. However, I’m constantly on the lookout for ‘planning gain’ opportunities and over the years have made many hundreds of thousands of pounds simply by trading in land. One of the best examples relates to a site I spotted whilst out shopping with my wife. That everyday shopping trip turned into a £300,000 windfall.

The site was a former garage premises very close to Bolton town centre which was up for sale with a local agent. It was on the market for £220,000 but was to be sold with a covenant preventing the site being used as a garage in the future. You see, the company selling the land had constructed a new garage close by and didn’t want their old site to be used by a competitor.

The garage had been on the market for some time (which is hardly surprising considering the restrictions of the covenant). Whilst the site was very ‘tight’ and positioned on a bend in the road, I could see its potential for residential use, provided I could obtain consent. As soon as my wife had finished dragging me round the shops, I made enquiries with the local planning office as to their views.

Luckily, they were fairly receptive to my idea, provided I could come up with a suitable way of servicing the homes by a refuse truck. Encouraged by their response, I quickly contacted the agent. I put in an offer at full asking price but stipulated that my offer was subject to me obtaining consent for residential development. To my delight, the agent emailed me the very next day with some fantastic news. The vendor had accepted my offer.

I instructed my solicitor to draw up a contract whereby I’d buy the site, on condition that I was granted detailed planning consent within 12 months, with an allowance of an additional 6 months if my application was refused. This give me time to lodge an appeal against the decision. As soon as we’d exchanged contracts, I got together with my architect and prepared a detailed planning application for a high density, mixed use scheme of 21 apartments, a retail unit and associated parking. Without much fuss or debate, the local planning committee granted permission for the scheme. The whole process took around six months.

I’d already calculated that, with planning, the site would be worth over half a million pounds. Had it not been for a river running along one of the boundaries which would require additional groundworks, the site would have been worth even more.

It didn’t take long for me to find a buyer. Six weeks after going on sale, a Liverpool developer bought the site for £535,000. My profit margin after architect, legal and planning costs? £300,000! I probably made more money from the deal than the Liverpool company who had to put in all the time, effort and risk of developing the scheme and selling the units.

I’ve completed many similar planning gain deals over the years, although I’m happy to admit, not many of them have been as straightforward or as profitable as the example above. That said, planning gain can be extremely lucrative and, provided you know what you’re doing, can deliver truly life changing rewards. Over the coming weeks I’ll be writing more about the techniques I use, including:

• How I source potential development sites.
• How I limit my risks by gaining legal control of a site before paying the landowner a penny and before obtaining planning consent.
• How I calculate the value of a site before and after planning
• How I decide on the most appropriate – and profitable – scheme for a site
• How I increase my chances of obtaining the necessary consents
• How I go about obtaining planning permission
• How I go about overturning consent refusals
• How I market my development sites and obtain the very best selling price

So if you like the idea of taking home a six figure, quick(ish) turnaround profit, watch this space!

I was speaking at my local property network meeting recently when a member of the audience asked me a very simple question. It’s a question that, surprisingly, nobody has ever asked me before. A question I should have been able to answer without hesitation. However, for some reason as I stood there in front of a room full of people eager to hear my response, my mind went blank.

I feel I must apologise to everyone who attended the event. I can’t imagine my long-winded and garbled response to such a straight forward question helped or enlightened anyone that evening.

Over the last few days I’ve replayed those few, long, embarrassing minutes of my life over and over again in my head. How should I have responded to that question? Why didn’t I have an answer on the tip of my tongue? I lay in bed for several hours last night, unable to sleep, unable to figure out how I should reply if someone asked me that same question again.

Eventually, I realised I wasn’t going to get any sleep until I’d figured out the solution. I wandered into my study, pulled out a pad and pen and wrote down the question which had thrown me so much the other evening:

“What piece of advice would you give to someone starting out in the property industry?”

I then started to list all the property projects I’d been involved in over the years. My scrawled notes filled several sides of paper. When I’d finished, I sat back and scanned through what I’d written.

It’s the first time I’ve ever compiled a comprehensive list of my property ventures and documenting them in black-and-white brought back some good, and some not-so-good, memories. I went through the list and highlighted those projects which I considered to be the most successful, those which produced the most profit, those which resulted in a fantastic return on my investment of time and money.

Suddenly it hit me. The solution had been staring me in the face. Why didn’t I think of it before?

The answer I should have given my expectant audience was…

“Always look beyond the obvious.”

Is that it? I hear you shout. Allow me to explain.

Like most people, my first foray into the property industry involved the refurbishment of a small house which I then rented out. Within a few years I’d built a portfolio of around 80 buy-to-lot houses. At that point I could have carried on increasing my portfolio or sat back, satisfied with the regular monthly income it generated.

But I looked beyond the obvious. I realised there were other, much more lucrative, ways to make money from property.

I moved into developing – in a small way at first – by buying a small piece of land and overseeing the construction of eight houses. I started trading in land, generating massive profits by buying cheaply, obtaining planning permission and selling at a profit. I discovered the hugely lucrative commercial property market and devised ways to earn life changing sums simply by introducing those in need of development sites, to those people who own suitable land.

I looked beyond the obvious ways to make a living out of property – refurbishments and buy-to-let – and uncovered new, even more profitable ways to generate money. So whilst most property investors have been hit hard by the recent downturn, I’ve been shielded from the worst effects of the crash due to my many different and varied sources of income.

But looking beyond the obvious involves much more than just devising new ways to generate revenue.

When I’m introduced to, or identify, a potential new project I carefully evaluate its potential. Quite often, at first glance, the numbers simply don’t stack up. At that point most people would walk away. But my experience has shown that a little extra effort and some out-of-the-box thinking can sometimes uncover massive hidden potential.

The construction of my dream home a few years back is a good example of how this approach can pay huge dividends.

Self Build

After several years of marriage, my wife and I decided we wanted to build a family home to our exact requirements. I knew the most economical method of finding a suitable plot would be to source it ‘off market’. I’ve always preferred approaching landowners directly, allowing me to negotiate a good price with healthy profit margins once planning permission has been granted. Using this approach allowed me to concentrate on the locations in which we wanted to live, rather than being restricted to whatever land was available and on the market at the time.

Using my tried and tested techniques it didn’t take me long to find the perfect plot… or so I thought!

It was situated in my ideal location. It was in an affluent area, around an acre in size and overlooked greenbelt with a stream running around the edge. However, after a quick appraisal it quickly became clear why this idyllic plot hadn’t been snapped up already:

1. It wasn’t on the market so few people knew of its existence;
2. It was a greenfield site which, in planning speak, means that it is previously undeveloped land used for agriculture or that it’s simply been left to nature. Whilst a greenfield site is not as restrictive as a greenbelt site, obtaining planning would be a lot more difficult than if the area had been developed previously;
3. Previous planning applications for nearby developments had been rejected – even after appeal – due to a single track, narrow blind bend on the only access road.

Faced with these hurdles most sensible people would quickly walk away. But my wife and I had set my heart on the site so I decided to approach the owners to see if they were willing to sell. Fortunately, the couple who owned the land were fully aware of the problems I’d identified and had even employed a local planning consultant to appraise the land on their behalf. In his professional opinion, the consultant had advised them that the site wouldn’t get planning permission to be developed. With his advice still ringing in their ears, they agreed to sell the land to me for just £20,000.

I took the view that if all else failed I could lease the land to a nearby farmer, rent it / sell it to one of the neighbours or just sit on it and wait for a policy change. There was some risk involved but in the end I decided to go for it and dusted off my cheque book.

Once I owned the land I had to attempt to change its greenfield status. I knew this would be tricky. It’s generally accepted that a greenfield site can only be reclassified as a brownfield site after it’s been used as such for at least twelve years. However, I had a plan!

Under planning legislation, a garden is classed as a brownfield site, even if it’s never had anything whatsoever built on it. In theory, you could have two plots of land side-by-side: the first plot, a beautiful manicured garden, full of flowers and shrubs and boarded by a topiary hedgerow; the second plot, completely overgrown with brambles and weeds. In this example, believe it or not, the planners would be far more likely to allow a development on the beautiful garden but not the overgrown scrubland weeds!

So, my solution was to create a neat garden on my land. I cleared the weeds, mowed the grass, created a pathway and even erected an old poly tunnel green house. Crucially, I kept the hedgerows and tress around the plot very high so it wasn’t visible from the road. I deliberately made the ‘garden’ appear to be part of the neighbour’s property. A few months after my transformation, the land appeared as though it had been used as a garden for many years.

It was eight months after I’d bought the land that I got the opportunity to hatch the final part of my plan.

My initial evaluation had revealed that on two separate occasions previous developers had applied to build a house on an adjacent brownfield garden but both were refused as a result of the single track access road. For obvious reasons, planners didn’t want to increase traffic use of the road any further. Both applications went to appeal. Both were still rejected. So the president against further development on the road was well established and wouldn’t be overturned… or would it?

Just down the road from my new ‘garden’, there was a small, dilapidated, one bedroom bungalow.

I approached my local planning officer and asked whether he’d support a development if I was to demolish the bungalow and replace it with a new property on the same road.

Although he agreed in principle, he tried to argue that the new dwelling could be no larger than the bungalow it was to replace. Not much point in that!

Fortunately I was able to argue that the size of the new house shouldn’t be a consideration. After all, I could just as easily apply to extend the existing bungalow adding four further bedrooms. The planners would have great difficulty refusing such an application as planning had already been granted for similar extensions to several houses on the street. In the end, he relented and agreed that he would support my application.

I immediately approached the owner of the bungalow and agreed to purchase it for £90,000.

So although it took around 15 months, I managed to turn an undevelopable greenfield site into a brownfield plot with detailed planning permission to build a 7,500 sq ft family home (ten times the size of the building it replaced). I could have sold the plot there and then for a tidy profit of around £140,000. Believe me, a quick £140k profit was tempting but it was never a serious consideration, we wanted to live there so set about building our dream home.

Covenant Issues

Another example of looking beyond the obvious involved the site of a petrol station/MOT garage which I’d had my eye on for some time.

The site wasn’t for sale but I approached the elderly owner to see if he was interested in selling. Although he was ready to retire, he was quick to advise me that there was a restrictive covenant on the site preventing any redevelopment. The covenant was in favour of the adjacent landowner, a major UK property PLC. They had previously scared off other developers interested in the site by demanding a huge fee to waive the covenant.

That sort of news would normally be enough to kill the deal. But I knew the land had huge potential if it were redeveloped as an apartment complex. So I contacted the PLC to see if I could succeed where other developers had failed.

The company was of the opinion that the site would be worth £500,000 with planning consent and were demanding half of that figure. I argued that site was worth nothing like that amount for three reasons:

1. The nature of the site meant that a lot of expensive ground work would be required before any construction could begin;
2. The contamination issues associated with its use as a petrol station would increase construction costs yet further;
3. The fact that the nearest public sewer was 50 metres down the main road would result in an expensive bill for connection.

I explained that due to these issues I intended to submit a planning application for just three detached houses on the site and showed them my scheme.

Faced with such a powerful argument the company agreed to surrender the covenant for a fee of just £40,000. I also managed to secure an agreement that the fee would only be payable once I’d gained planning permission. However, I didn’t specify what sort of permission I intended to obtain… so was able to proceed with my application for apartments.

The rest was easy!

I submitted my planning application which was approved without problems and bought the site from the owner for the £460k agreed. I also paid the PLC their agreed fee of £40,000. The land was subsequently valued at £700,000!

So in conclusion…

I hope these two deals highlight the fact that if you’re willing think outside the box and show a little patience, it’s possible to succeed where others fail. You just need to look beyond the obvious.