Property Development Question

[boysey]

I've been looking around for a while to buy a house which needs renovation and quite unexpectedly found a nice plot of land in a nice area. The one problem is that it is on the upper side of my budget. My question, when budgeting for the total build cost of a new house, what numbers do people use per sq ft / sq m when doing the initial budget?

Cheers

[jamesuk28]

we tend to work on £100 - £105 per square foot. This is pure build cost to a good standard and excludes other costs like the land purchase. It can be build cheaper £80 per sq foot is poss, but the finish reflets the build cost.

[smirnoff]

What sort of budget are you looking at. It is possible to fnd 95% of the plot cost and 95% of the build cost if both together don't exceed £350,000.

Edited by smirnoff on Monday 25th September 10:32

[rich25]

PLots of any size can be finainced at 90-95% ltv. I find this particularly straight forward on builds of £500k+ of debt. The common rule of thumb on a development project is third/third/third.

What I mean by this is that of the final gross development value the land purchase represents one third, the build one third and the profit one third of costs.

However recent experience and rising build costs mean that you may now be looking at ratios as little as 20/40/20.

[boysey]

Thanks guys ... the plot cost is £350k, the size of the house according to the outline PP would just about make sense an get into my budget based on these numbers.

Any recommendations for best deals on financing the land / build?

Cheers

[rich25]

anonymous said:

[redacted]

Who's pocketing the other 20%? You want to have a word with your accountant, mate.

Ooops!! I think my accountant does need a chat! I believe he meant 30/40/30!!!!