Beginner’s Guide on Starting a Property Development Business in the United Kingdom
Property Development is an incredibly thriving industry. Its market has had an undeniably huge growth rate over the past years, and you may want to take advantage of this by starting a Property Development business. If you want to know more, let 3E Accounting walk you through the process of starting one!
What is a Property Development Business?
When you look around you, what are the things that you would see in any place? Buildings and houses, right? Property Development has become a serious business because all of us need a roof over our head, a place to gather and enjoy, a building to put up our businesses and go to work into, and many more.
You may know property Development as Real Estate Development. It is the act of developing lands and buildings so they will have a higher use-value. Aside from that, it is a diverse business, which may include any of the following:
- Procuring a land and building a property on it
- Extending, renovating, and enhancing an existing property
- Transmuting the use type of a property
Those who are into this kind of business are called Property Developers. They are considered entrepreneurs who perform real estate development, and their main job is to add value to land or property. They profit from adding value to their developments. Furthermore, this business has been the most profitable because the market value of a property increases over time.
What Are the Trends in the Property Development Business?
Before you worry about starting a property development business and your UK company registration, it is important to know the status of this industry first. 3E Accounting has knowledge of different industries, so we can provide our clients with the best insights and guide them thoroughly throughout the process. Here are some trends and insights in the real estate industry.
It is not a secret that the COVID-19 pandemic has impacted this industry. Recent studies show that industry revenue is expected to plummet by 15%, and this is caused by many factors. The first one is that people have less buying power because most were laid off from their jobs. Another one is due to the lockdowns experienced that halted the operations of property developers and prolonged the completion of their projects.
However, this is only a small bump on the road. When we have found a way around the pandemic, the Property Development industry will greatly recover. As a matter of fact, the global real estate market is projected to grow from $2687. 35 billion in 2020 to $2774. 45 billion in 2021 at a 3.2% compound annual growth rate. Thrust, starting a property development business would be a smart move.
What Are the Different Segments of the Real Estate Industry That You Can Venture Into?
The real estate industry has three main segments. These segments include residential real estate, commercial real estate, and industrial real estate.
Residential Real Estate
This segment is focused on buying, developing, and selling properties that will be utilized as homes or for other non-professional purposes. It is made up of single-family homes, condominiums, apartments, planned unit developments, and many more.
The value of the residential real estate sector has been steadily increasing over the past few years. In 2019, the average home prices were pegged at $316,000. Moreover, the value of the whole residential market is estimated to be more than $27 trillion. Thus, if you want to take advantage of this, 3E Accounting can help you with your company incorporation.
Commercial Real Estate
The second major segment is commercial real estate. It includes properties that are used for business purposes, such as shopping malls, retail spaces, common types, office spaces, hotels, and many more. The latest estimated value of the commercial real estate market is pegged at $16 trillion in 2018.
Industrial Real Estate
Lastly, the industrial real estate segment is composed of properties that are utilized for manufacturing and production activities. Such include factories, warehouses, and plants. This segment is also posing a good trend and has ended 2019 strong. People also expect rents to rise in the future, so starting a property development business in this segment will be profitable.
How to Start a Property Development Business?
What are the steps that you need to go through in starting a property development? Well, 3CE Accounting has compiled them for you to follow!
Step 1: Do Your Research
Educating yourself about the business that you will be venturing into is a vital step. You can get knowledge about the property development industry in many ways. You can read materials online– there are many property development blogs that are incredibly helpful. Aside from that, you can also check on property growth deports and market development statistics, so you will be equipped with the numbers that may become vital to the decisions that you will be making along the way. It is essential to make sure that you are well equipped with the knowledge to manage and lead developments.
Besides that, it is also important to research your existing competition. Find out about their processes. How do they identify their developments? Who are their contractors? Who is their target market? Also, research about their tactics. How do they sell? What are their mediums of selling, and how do they advertise? How do they price their developments?
Step 2: Build Your Business Plan
Once you already have an understanding of the industry and your target market, you are now ready to develop your short-term and long-term goals. It is critical that you consider your larger business outcomes as you create the primary foundations of your business.
Besides that, this is also the part where you think about how you will become different from your competitors. Do you want to offer green developments to help the environment or, perhaps, transit-oriented developments to help people with their daily commutes? Regardless of what you want to be, 3E Accounting is here to help you every step of the way.
Step 3: Know About the Business Registration Process and the Licenses and Permits Needed to Start Your Business
Of course, before you can start your business, you will have to register it first. You need to secure a name for your company and have it registered. After that, you need to choose if your company will be a sole proprietorship, partnership, or joint venture. You will also need to pick a location that you will register as your business address. Then, you will have to submit your memorandum and articles of association.
There are also lots of permits and licenses that you need to have. You must have a building license, permit to operate, building permit, and the list goes on. Luckily for you, you can contact 3E accounting. We are a corporate service provider who will help you with your business registration!
How We Help You Get Permits
The properties and real estate industry hold so much promise that numerous entities want to enter this market. The UK government is well aware of this situation, so it imposed documentary requirements for those who aspire to become property developers.
At 3E, we can help set up your account at the HM Revenue and Customs (HMRC). All forms of taxes, including income and land tax, are managed by the HMRC. As such, you need to have your property development business listed on their database.
Another type of license that you may need is the social housing provider registration. This permit is applicable in case your company’s goal is to construct and develop social housing sites. The Ministry of Housing, Communities and Local Government, also known as MHCLG, is responsible for overseeing this registration.
If you wish to develop properties for multiple occupancies, the permit you need to get is called an HMO license. Issued by local governments, a house in multiple occupations or an HMO license ensures that certain standards are met by properties housing multiple tenants.
Social housing provider registration and HMO licensing are within the scope of 3E’s work, and we are well-equipped to help you secure them.
Build with 3E Accounting!
Property Development is indeed a good business to venture into. However, before you reach the peak, you must first go through the hard way of taking care of the nitty-gritty of establishing a company. 3E Accounting is here to make your life better and help you achieve your dreams easier. We can assist you with your business registration, and we can take care of your permits and licenses for you. All you need to do is become a good leader and make good choices with us by your side! So, don’t hesitate to contact 3E Accounting!!
