Richard Butler Creagh : Is UK Property Still A Good Investment?
10:11Richard Butler Creagh Talks about the market challenges facing property developers heading into 2019.
Welcome to the Richard Butler Creagh blog. Richard Butler Creagh started his career in building an industry where he ran his own company based primarily in north-west London called Butler-Creagh Refurbishments specializing in working for developers and refurbishing their properties to prepare them for the market. In 2013 Richard Butler-Creagh founded Henley Finance which provides short-term bridging finance to the property development sector. Here is Richard Butler Creagh's advice on how the market challenges facing property developers heading into 2019.
Land values
Finding the right opportunities at the right value has been one of the biggest themes of the year. Landowners simply haven’t aligned their expectations with falling GDVs. The result has been narrowing profit margins that have meant some developments are impossible to do and increased competition for sites where the numbers do stack up.
Market sentiment
Brexit is clearly a defining challenge of the year and will be going into 2019. The uncertainty around what a final deal will look like – coupled with wide-ranging commentary about the implications for the economy – has seen buyers lose confidence.
Extended sales periods
The knock-on effect of a slowing market is an increase in sales periods. The market slowdown has thrown multiple spanners into the works. It is vital now that developers take a proactive approach to sales and start the process as early as possible.
Funding
As GDVs are squeezed, sales get harder; the cost of debt and the funding available decreases. Developers are having to get ever more creative to address these funding shortfalls, whether that’s expensive finance exit products, mezzanine loans or refinancing as a buy-to-let (BTL) and holding until sales pick up.
Bottomline
These challenges won’t abate come January, but there’s a couple more to add to the radar as Brexit approaches. Beyond the obvious risks to the economy, Brexit also has the potential to impact demand, with tighter mortgage lending criteria and immigration checks for foreign buyers a possibility.
Whatever the future holds for the property market, taking advantage of opportunities has clearly never been more important. If you are considering purchasing property then speak to a finance expert beforehand to assess all your options. Contact Richard Butler-Creagh on the Henley Finance website. Read more about Richard Butler Creagh online here and join the Richard Butler Creagh professional network on Linked.
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