If you are planning a home extension or building project there are two distinct sections to your project the first is the design stage and the second is the building stage. Dependant on the size and scope of the project will depend on how much time is required for the building project. Many building projects require input from the local building control department if they involve structural alterations under part “A” of building regulations or often under part “L” which covers the thermal efficiency of buildings. This can either be done under a building regulations notice or full plan submission. To satisfy building control that your proposed works will meet current building regulations you may require building regulation drawings. These are sometimes referred to as construction drawings as they contain the details of the various specifications of the materials to be used or the layout of a building scheme. The other consideration is that what you ask your building contractor to build, is also what you envisage as the finished project. A lack of design and detail can often lead contractors to make alterations as they see fit, many contractors can advise from past experience their opinion of what is the best way to achieve the results you want. This can however lead to confusion for instance if you ask a contractor to cut a new doorway in do they realise the exact position of the opening? Can you still fit that new item of furniture in next to the new doorway? So take time to establish final design and material choices prior to starting the project. The second stage is to find a reputable building contractor it is never that difficult to find a builder who is willing to start your project but what will the end result be? You should spend some time talking to the contractor do they have the right type of experience in the type of project you wish to undertake? Ask to see examples of previous projects they have successfully completed, good contractors will also be able to give you references from other construction industry professionals they have previously worked with surveyors, structural engineers and architects. Although project budgets are always close to a home owner’s heart do not always just be driven by price. Good contractors can charge a premium for their services but this can offer good value as they can work with you to suggest alterative materials and specification that can actually reduce costs. The other consideration is that some contractors can be a little more honest than others. So make sure you take plenty of time to review the quotations, good building contractors will make sure they include all the items you will need to successfully complete your project. They may also add provisional sums for items like tile choices and electrical works that are harder to quantify during the design stages of the project. You may find that short less detailed quotations are more difficult to compare and do not offer the fixed price certainty that a more detailed quotation will provide. Less scrupulous contractors will “go in cheap”, and win it back on the “extras”. Basically the items that should have been included in their original quotation, you may not enjoy hearing “sorry that was not included in the original quotation” for the fourth or fifth time. So like most things in life you only get out of a building project what you put in, so take the time to put in a sensible amount of time and money to achieve the end results you desire.
It has now been several years since the first questions were raised over the published LIBOR rate this is the London interbank offer rate. The figures that banks use to borrow from each other and the figure often used to set interest charges on mortgages and other property backed finance. The British Banking Association decided to create two sub committees to check that the LIBOR rate was reflecting the real picture of interbank lending. If the rate has been manipulated it could have effected mortgage payments and bank facilities used to back property investment and property development. With the lack of suitable speculative property development funding this has been another blow for property development companies. Paying a premium for development finance when the market has suffered such a down turn has not been useful. With many developers and house builders having not only seen steep rises in finance costs but also suffered a steep decline in the capital values of their land banks and other property back assets.
There has been a marked increase in the installation of new green products to new build developments, this is partly due to the government’s commitment to build zero carbon properties by 2016. A recent survey has studied which technologies are being used. With solar PV being the most used as an easy bolt on extra to existing designs. It also showed that occupiers are not fully aware of how to use the systems to get the most advantages and did not fully understand the benefits. With most developers using just a couple of technologies to help meet carbon targets. The report recommends further education and support for the occupiers so they get the full benefit of the technologies that have been fitted to their new homes. It seems that developers are motivated to install new technologies partly by their desire to understand the pros and cons before these items become more of a necessity for new build homes. With the increase in the fitting of simple but very cost effective solutions like positive input ventilation. While many occupiers see the benefit they do not take have a full understanding of all the advantages.
The number of new mortgages taken out by home buyers has increased dramatically in the last month. With an incredible increase of twenty four percent and an increase of thirteen percent on the same period last year. Figures from the council of mortgage lending showed that an impressive £12.2 billion pounds was lent to home buyers and home owners by banks and building societies. Many in the mortgage industry have pointed at the end of the stamp duty holiday as the reason for a marked increase in mortgage activity earlier in the year. The continued activity has surprised many in the property industry and the braver amongst them are starting to call the beginning of the recovery. With an increase in mortgage products and demand remaining stable from potential property purchasers. It looks like good news for new borrowers and particularly first time buyers. With first time buyers being the life blood of the housing market it is another reason for optimism.
With recent moves to force companies to publish their emissions data this will not only be good news for those companies that think green it will also be positive for those that refurbish commercial properties. Seventeen percent of the UK’s emissions are produced by non residential properties so any measure that will assist in reducing this will be beneficial to the whole of the UK. So who are the losers from this new measure? It is companies or landlords who hold commercial property that is not energy efficient. Some commercial properties are far easier to improve the thermal efficiently of than others so it could even have an effect on the capital values of some building and indeed the book value of some commercial property portfolios. Will this be picked up by the banks? The letability of poor performing property could have an effect on landlord’s abilities to pay bank facilities? Potential tenants will be careful signing leases if this leads to capital outlay to improve the energy efficiency of their commercial premises.
The ripple effect is often quoted in the property sector this is when buyers are forced to consider secondary locations as they are priced out of their primary target market. It is often the first signs of a sector recovery. With prices in prime and super prime London residential moving up it looks like the commercial sector is starting to move as well. With the recent gains in west end rents in London moving up the interest of potential business tenants and buyers to secondary locations this will ultimately increase prices in these areas as well. Many in the property sector follow the London markets closely as a good indicator of the future performance of other areas in both the commercial and residential property sectors. With the recent announcement of increased funding for the mortgage markets from alterations to the way banks are allowed to lend. Combined with increased demand and low new build rates it look like they could combine to move the property sector into the upward path in the property cycle.
The Bank of England has pledged to increase the amounts banks can lend to businesses and for mortgage lending. This is desperately needed and has been called for by many economists for some time, there is still the cry of too little too late by many economists. Many experts from the world of finance and property have long suggested that these measures should have been exercised simultaneously with quantitative easing. So what difference will this make? That depends greatly on the banks, banks have suggested that there is little appetite for borrowing. Many businesses, borrowers and house buyers have been put off even applying for lending as it has a negative effect on their credit rating if they are turned down and also they feel there is little point as lending criteria is so tight. This has lead to a cycle of less demand and less supply. Hopefully borrowers will feel more confident if funds are more readily available and banks will react quickly to the pent up demand from borrowers and home buyers. This is needed to increase transaction levels for house purchases and increase the UK’s woefully inadequate new build rates. Like the stock market the property market reacts badly to uncertainty. With the residential housing market not only driven by the market fundamentals like average earnings to house price ratios. It is also lead by sentiment people are very unlikely to buy houses that they feel may drop in value, they simply wait. Also existing home owners need little motivation to stay put but if they feel that if they put off moving up the housing ladder they may be priced out of the market they move swiftly. The banks have profited greatly recently as they have been quietly increasing tracker rates at the same time as the libor (London interbank offer rate) the rate at which they borrow has been moving down. The mortgage and property market needs a sensible and sustainable level of competition to help stimulate the housing and construction market while constraining the boom and bust of the property cycle to the minimum. The property market will always have peaks and troughs but with sensible management of the mortgage markets and money supply it will help to regulate the cycle.
When you are undertaking a major building project or planning a home extension you are going to spend a large amount of money so you will no doubt have concerns that you select the right building contractor. Like all trades and professions all the individuals and companies that operate in their sector are better at some projects than other. For instance if your main driver is cost for a small and simple building project you may find a one man band may be the best option. Or if you have a more complex or larger project you will need to find a building contractor who has a wider skill base. For the best results you will need a project manager this may will be the most building company’s owner , managing director or general manager. As product technology has increased and project become more heavily regulated it is becoming more and more challenging to run even relatively small domestic extension projects with a working foreman. You need a building contractor who is large enough to have some full time office staff to manage the various deliveries and building control requirements to keep the project on time and on programme. For instance if you have a busy working foreman with a spade in one hand and a phone in the other is he best placed to look at savings for you the client if there are changes of works. A larger building contractor will have the resources to allow an office based member of staff to research the options and potentially save you thousands of pounds over a project. It is often the case that although small firms and contractors may give lower prices on day one, they are not always the most cost effective in the long run. As with all things in life there is no getting away from the fact you get what you pay for. Smaller contractors often still have a high level of quality finish but they simply do not have the time to respond quickly to client and professionals e-mails quickly as they are often out on site. It is often the case that items like brick choice and finishing details suffer as a result, so although the work is good the end result is never quite the same. When an office based project manager is on the project to take time to respond to client details confirming specifications of design and client material choice in writing. You not only know just what you are getting but also you have less chance of getting in a dispute of what costs and material choices have and have not been confirmed. The most important thing to check is the quality and finish of the building contractor’s previous building projects. Be careful relying on phone references make sure you visit a working project or meet their previous clients and ask them for their experiences first hand.
With youth unemployment running at a 17 year high and house building running at such historic lows it does not take a genius to wonder if higher build rates could have a positive effect. With the UK population growing at four time the rate of that in the 70’s and the continued number of single occupancy residences. It looks like the demand for housing is not going to drop any time soon but build rates still remain at painfully low levels. It has been estimated that investment in house building could soak up as many as 2.5 million from the jobless total. When you also consider that the annul build rate is running at around a 100,000 a year and the target is just short of a quarter of a million. If we continue with these woefully inadequate build rates we will have an eye watering short fall of 750,000 homes by 2025. So there is no doubt that this could be a win win for unemployment and housing demand, let’s not forget the potential return that tax payers could receive from investing in house building.
The 85% loan to value buy to let mortgage has returned to the mortgage market, the mortgage is available from Kent Reliance a subsidiary of the RBS. With this new product entering the market it will more than likely lead to other lenders following suit. The loan to value of a buy to let mortgage is critical to landlords as it allows there cash reserves to stretch to more properties. Many landlords believe we are at the bottom of the property cycle and are looking to expand their property portfolios. They can use higher loan to value mortgages to gear their existing funds and purchase properties that would otherwise be out of reach. It also prompts new landlords to buy whereas before their target properties may have been out of reach. It also shows that some lenders consider that the buy to let market is looking like a safer way to get a return. They obviously have more confidence that buy to let landlords are less likely to default on their mortgages. They must have renewed confidence that the capital values of the properties their loans are secured against is less likely to fall. The additional buyers that these loans will be available for will have a positive effect on the overall housing market. It is usually the case that rental properties require a programme of refurbishment so this will also mean more money dripping back into the wider economy.