To say that the new-build market is thriving is an understatement. According to recent figures by NHBC, 5,025 plots were completed across the UK in January 2013 alone, as more and more individuals are looking to invest in a plot of land and build their dream home or office from scratch.
The NHBC data highlights that in January 2013, average daily sales stood at 357, a rise from 317 in January 2012. Furthermore, a mammoth 7,547 private sites were registered, which is a huge increase from the 5,977 recorded in the same month a year earlier. Dissecting the data further, the south-east of England unsurprisingly led the pack for regional completions, with 1,055 new-builds. This area was followed by London and East Anglia, with 672 and 627 completions respectively.
As this data suggests, more developers are seemingly entering the sector to take advantage of the favourable market conditions. There are many opportunities for potential property developers, as long as the land has pre-approval right for homes to be built on. Initially, all land must be assessed by a reputable surveyor, and a solicitor will check any planning permissions that may or may not be on the property. If the land has no outline planning permission (OPP), you actually cannot build on it. An OPP will allow a new site to be constructed, but the type, size and design of the property will further need to be approved by your local authority. A detailed planning permission (DPP) means you don’t need any approval, but building must occur within the first two years. An OPP is valid for five years.
A planning representative from the council will inspect the land and then you can send a formal application off. The council’s planning committee will make the final decision. Building regulations will also need to be considered so that all properties are built to the highest standards and potential tenants are not put in risk.
This recent surge of new builds is hardly surprising considering the launch of the government’s Help-to-Buy scheme. According to Knight Frank’s latest annual new-build report, various new-build markets have grown exponentially in regional city centres. The scheme, which came into force in April, offers a 20 per cent equity loan from the government for those who have saved a five per cent deposit, enabling them to buy a new-build home worth up to £600,000. This loan is then interest free for up to five years.
The UK government hopes that the scheme will help 74,000 buyers in the next three years, but if anything, it may be property developers that benefit the most under this scheme. For those that have comprehensive experience of the commercial property sector, new-build developments on raw plots of land offer great returns on investment. The final properties can be rented over a period of time in order to meet mortgage repayments, and then eventually sold depending on property value fluctuations.
If you are considering a new-build project, PropertySales has a wide variety of plots of land for sale.