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FINDING BUILDING LAND

Finding suitable land for building in the UK has been very difficult recently (UK 2006-2007) as prices have often been higher than any building you might put on it. The raw materials cost more than the finished product... which meant the housing bubble was about to burst. Which it duly did at the end of 2007.

Whether owners of land will sell for less, or just hang on until the next upturn, is anyone's guess. Now is an interesting period for property in the UK. It depends on the exposure of the people holding the land assets as to whether they sell quickly or hang on, so it is very dependent on the bigger economy.

Predictions from previous sharp downturns indicate a 20-30% drop over the next 2 years. But who knows? As the joke goes, put four economists in a room and get five opinions...

Finding land or properties

I am discussing finding small plots of land for one or two houses, or single properties. We are a small eco builder so do not delve into the larger plots, although it would be nice someday. These are the plots that might appeal to a self-builder or small developer.

The basic rule is 'buy cheap sell high' and the mistake people have made recently is buying high... which will lead to pain later. With the mania about property in the media, it is not really their fault. Of course the Banks always do all right whatever happens - profit is privatised and debt is nationalised - see Northern Rock.

Main sources for deals are:

Estate agents

This might seem a bit too obvious but they do have plots and run-down houses occasionally. The eco house built in Clapham London, that was the subject of the book 'Diary of an Eco Builder' and even made it to TV, was found in a local estate agent on Clapham High Street.

Looking for suitable properties is a very time consuming task, not like looking for a house to live in yourself as your geographical range will be much wider, possibly national, and a much wider range of properties or land will appear interesting. And then not be interesting at all.


Finding building land to build on

The bigger Agents have dedicated departments for new build, and might know about sites, but they tend to be more expensive and for multiple units. A unit is a 'home' and so could be a studio flat or a McMansion.

A McMansion is a tasteless large house, often on an estate of other McMansions, with smallish rooms, and lots of standardised added extras, that appeal to middle management or poorer football players. A proper mansion is either period or individually Architect designed.

If you are looking in a particular area, do the usual drive-around and look for signs and adverts.

We found a site in the East End of London this way, from an Agent who did not operate on the High Street. A small sign was placed in the window of a warehouse! We were driving around checking out an area, and this was exactly what we were after - a local Agent with a semi-closed book of commercial and similar property.

Auctions

There are a lot of these all year round, and all around the country. Sign up for the catalogue (usually can be done online, or call) and then spend ages traipsing around horrible run down houses and nasty brownfield sites, in terrible areas... but that's part of the job.

Property developers have to be optimists.

Properties have time slots for visiting - say 3pm Tuesday 12th or whatever - and you will see the same old crowd there, inspecting all the features, developers with a builder in tow, or just builders fancying a side job. These unreported social scenes can be quite friendly. Be prepared for very rough and even dangerous properties so dress in work clothes - and I don't mean a suit.

There are also repossessed houses, due to some financial disaster, which are a bit sad, but someone has to buy them. These are sometimes advertised locally or in free listings before they get to auction.

At the auction, to buy you need identity proof to stop money laundering (as if) and some ready money as you have 28 days to settle.

Private agents

Many companies exist to channel properties towards potential buyers, and take a fee, usually from the buyer. This can be a per cent or more and will add up for an expensive property. Negotiation is possible.

We have used some of these and they can find land and especially run down properties that might not be that easy to find. You are generally paying for your own laziness though, as now all sites are online somewhere. Thorough searching will come up with most properties they channel towards you, so it depends how much time you are prepared to put into it. If you are looking locally, say within 50 miles, you might as well use your own time and patience.

It is unusual - but we have benefited from it, so it does happen - for an Agent to have 'off market' property, as some have excellent contacts. These can be real bargains as the vendor wants a quick sale.

Refurbishing properties

Tatty houses, and properties that could fit a loft or extension, or be divided up into flats, can be done up and sold ('refurbed'). This is a very boring job suitable to builders really, who always used to do it before the middle classes flocked lemming like into property.

The money is made here if you do the whole job for cash, by which I mean without borrowing from the bank, as the interest payments can easily outrun any profit, especially if there are delays, which often happen.

Refurbing is not VAT zero rated, new build is. This has bad eco effects as perfectly good buildings are demolished as it is cheaper and easier to start from scratch. This was intended to stimulate industry.

You can demolish to the foundations and reuse those, and still count as a new build. There is also a rule about how long the property has been empty (5 years), which changes the VAT status, but check all these details as they change every year in the Budget. This book is not giving any tax advice, just note these are the sorts of things you have to think about quite deeply.

Is it worth doing?

Property has only become trendy because of TV and mainly plain old greed - and it only works well in a booming market. It looks easy because it is, but read the books as it is easy to get carried away and put in expensive rubbish that won't help the sales price.

Some projects look great at first until detailed calculations are done - include everything, adding 10-15% at least for safety, and no wishful thinking. (Unless you know what you are doing of course). Get it properly surveyed or you will receive nasty surprises. Don't forget to add bank interest and charges, and assume an over run for the sale. One TV show on property had a buyer who didn't know that he had to pay Stamp Duty in the UK. So check your lists. There are dedicated books on this subject, the best of which are the Property Ladder TV series tie-ins, which are well produced too.

When prices are going up, anyone can make money, so the recent boom years are no indication of anything. Some people got lucky and made millions, and now they think they are captains of industry. Buy to let, anyone? [Note end 2008 - well it has crashed now so land is cheaper but as there is no GDV (end value) calculated as the bottom or future prices are not known, buying is very risky]

These dabblers are known in the trade as 'gentlemen builders' - although many are of course women. 'Lady builders' can also join in the fun.

Land inspections

Land is a bit different for inspections as it is often open access. Be careful of dogs, and wear tough jeans and boots as you might want to explore - have the property details to hand printed out, in case someone asks what you are doing. Land could be overgrown and full of brambles and nettles, potholes and dangerous rubbish. People often dump chemicals and various nasty things on waste land.

If it is semi-industrial you will need proper access so check carefully in case you get there and it is locked up.

Always take a camera and if possible an A-frame ladder in case you want to take some photos. Land may well have a high fence around it. And don't forget the tape measure, a good sized long professional one.

Take pictures of the site and a panorama, a full 360 degrees, around the location, as you will not remember what is there and what isn't. Also take pictures of any roads approaching.

Take a colleague or friend if possible as the two of you will notice things one person might miss. Also useful for measuring up, and generally making the trip more fun.

Site research

Use Google Earth to have a look at the general site. This is very useful for seeing where things are in relation to other buildings, roads, open space etc, and provides information not available from a site visit. Some sites can be ruled out using this method, but it is always good to see for yourself.

Also use any online maps for roads and general transport links.

Use an online house price finder to see what houses actually go for in the area. This will also show the types of houses, flats, semis, detached, terraced etc.

Ignore what estate agents say unless you know them from previous jobs or enquiries as they will obviously exaggerate. A lot of them are very junior. They are a friendly bunch and you will probably see them again so always be nice. I am sure you would be anyway! Also being honest about discussing what you are after and what you want to pay, even if you don't have much, as they will try and get a sale of anything they have or know about. You never know what else they might have, or who else they might know.

Individual plots will usually have to blend in with the area, which means you can't charge too much and sometimes buyers will be less interested as they want (say) a traditional house, as that is what has attracted them to the area in the first place.

Garden sites

We don't approve of these as you end up with cramped, often semi-underground houses, and it has a very bad effect on flood risk and biodiversity. It is sheer greed that propels this part of the market. Along with the strict restrictions on green belt land of course.

We have seen many plans with half the building underground, as if a giant foot has landed on it and pushed it into the ground. Since when has living half underground been cool? This type of building is less green as well, due to lighting, heating and general excessive use of materials. See www.news.bbc.co.uk/1/hi/uk/7210380.stm

Brownfield

Often small plots between houses or on awkward access or sloping sites. We build on these, even though an urban jungle is removed, which is a shame. This is why eco-friendly gardens and green roofs are important, since you are removing a patch of real nature. Whatever timber/straw etc house you put on the plot, you are still destroying a habitat.

Soil analysis

The soil has to be tested for contaminants such as oil, poisons, arsenic, etc. This has to be done by a by a geotech engineer in a specialist lab. Radon is also tested as a standard now and comes up in property searches.

Clearing a site

This can be expensive. Hazardous waste such as asbestos has be removed carefully. If the soil is poisoned, the entire surface will have to be removed. So-called 'muckaway' services can do all this work for you.

Then the Edenic urban jungle will be totally removed and replaced by a levelled dirt surface ready for measurement. This is of course a big, if unavoidable, issue for green building, as if the site had been left, that little oasis would still be functioning.

Because planning rules are so strict for the rural Green Belt, urban sites have been ravenously devoured in the last few years since Prescott obligated Councils to give planning to such sites. There are also Government funded plans to increase 'urban densification' by 50% - goodbye gardens!

Site survey

The land on the site needs to be accurately measured including height. This is done by a land or building surveyor. They will provide a map and also datum point (s) around the site - these are metal heads like nails that provide fixed points.