A Guide To Getting Started In Property Development

Property development within the UK can be an exciting and lucrative venture, for those seeking to expand their wealth or even establish it as their primary business. Although government regulations, finance updates and unforeseen circumstances such as the pandemic have unquestionably influenced the UK housing market. Creating a somewhat less enticing feeling towards property development than prior years. However, the industry remains a stable long-term investment avenue that can yield substantial returns when executed correctly.

Despite the economic downturn, along with tangible challenges such as material supply chains and costs, as well as difficulties in hiring post-Brexit, there are indicators that the UK property market will persist in growing over the medium term. UK property development still stands as a more dependable option compared to most other sectors.

Although it is crucial to understand the process involved before you embark on your journey. Whether you’re a novice or a seasoned property developer, having a clear understanding of the steps involved can make your project smoother and more successful. This guide aims to provide you with insights into the risks, rewards, and genuine opportunities associated with entering the field of property development.

This property development guide will cover:

  • Creating a property development business plan
  • Buy-to-let vs buy-to-sell
  • Market research
  • Calculating ROI/Rental yield
  • Renovating for sale or rent
  • Financing your property development
  • Final thoughts

Property Development Business Plan

To a certain extent all business plans no matter which sector follow a similar structure. Overall, the plan should outline your business objectives and the strategies you’ll employ to achieve them. Begin by defining your goals and objectives for the project. Determine the type of property you want to develop, the target market, and the expected return on investment. Several critical components demand clarity before you embark on any investments.

Start by addressing the following:

  • Who is your target market?
  • What sort of properties are likely to appeal to your target market?
  • How are you going to obtain funding?
  • Expected timescales and costs for construction or renovation

There are various property development business plan templates, experts and management software that can help you create your own.

Opting for Building-to-Sell or Building-to-Rent

The next step involves making an informed decision about the specific type of project you want to concentrate on. In order to align with your objectives, thorough research is necessary to determine the most suitable business approach. Build to sell or build to rent. These represent two lucrative property development business models. However, the decision between the two is crucial.

Building to Sell

Under the building-to-sell model, your aim is to construct one or more properties for the purpose of selling them. After successfully completing a project, your focus turns to selling the property for a profit. You may also consider purchasing a substandard property, renovating it to a high standard, and then selling it for a profit. These approaches yield returns through capital gain, typically selling at a higher price than your total construction costs. Many developers using this method transition from property development financing to development exit financing to minimise interest expenses.

Building to Rent

This business model is centred on constructing a property with the intention of renting it out. Building-to-rent aims to establish a consistent, long-term income stream. Depending on your rental agreement, you can expect a fixed, regular income from the property. However, this model necessitates diligent property maintenance to preserve its value. Including arranging for repairs, ensuring that things like the smoke detector and boiler are regularly inspected, and potentially even finding tenants and checking their references and credit scores. It provides extended term returns but may pose challenges in securing funds for your next project.

It’s worth noting that you can transition between different property investment models. For instance, you might decide to sell a property after renting it for several years or use the gains from a buy-and-sell property to venture into a buy-and-hold investment.

Market Research

Before any investments take place, it is vital to conduct thorough financial analysis and gain a clear understanding of the real estate landscape in your chosen area. Familiarise yourself with the preferences of potential buyers or renters in that area and determine your budget for property acquisition. Commencing your property investment journey in a nearby location is often wise due to your familiarity with the local area. However, you might also consider exploring more distant areas to discover which have significant growth potential. Search for regions where properties are in high demand, sell swiftly, and show signs of active construction or investment, as these are promising indicators of an area on the rise.

The Significance of Location

The key is to identify areas just on the verge of becoming popular, where housing prices are poised to rise. Look for locations situated at the outskirts of bustling urban areas or for buy-to-let investments, university cities are a favourable choice. Websites like Rightmove offer easily accessible data on the selling prices of houses in various areas.

Always put yourself in the shoes of your target audience. Accessibility to transportation is crucial, as young professionals and students seek proximity to bars and restaurants, while families prioritise safety and access to quality schools.

Establish connections with local real estate agents who possess insights into the preferences of potential buyers and renters in the area. Regularly check in to cultivate personal relationships that ensure you’re the first to be informed when suitable properties become available.

Financing Your Property Development

Next you need to establish a budget for your project, including acquisition costs, construction expenses, and any other associated costs. Seek financing options and secure the necessary funding. There are various options for property development finance from bridging loans, development finance and mortgages. Here are just 4 options you can start to consider.

  1. Property Development Finance: Development finance is a type of lending that helps businesses, entrepreneurs, and property developers to access funding for development projects – both residential and commercial. BLG offers both seasoned developers and those just starting, development loans from £1,000,000 to £15,000,000.
  2. Bridging Loan: Bridging loans are short-term, high-interest loans often used by individuals needing to acquire a property while waiting to sell another. Property developers also favour these loans, using them to purchase, renovate, and subsequently sell properties, repaying the loan and interest in the process. These loans are secured, making them most suitable for those who have property or land that can serve as collateral. A clear exit plan, outlining how the loan will be repaid at the term’s end, is essential. BLG offer property developers loans from £500,000 to £10,000,000 up to 12 months but longer term can be considered.
  3. Buy-to-Let Mortgage: If your intention is to rent out a property after purchase, you can’t rely on a standard mortgage. Instead, you’ll need a buy-to-let mortgage. These typically come with an interest-only structure, larger deposit requirements, higher interest rates, and increased fees compared to standard mortgages.
  4. Buy-to-Sell Mortgage: Standard mortgages are not suitable for those looking to buy, renovate, and quickly sell a property. Opt for a buy-to-sell or flexible mortgage, which allows for a shorter holding period. However, this convenience comes at the cost of higher interest rates, elevated fees, and a significantly larger deposit.


Property development can be an exceptionally profitable and fulfilling pursuit. While it requires dedication, instinct, and skill to excel in it, it’s a field accessible to anyone willing to learn. By following these steps, you can navigate the property development process with confidence and increase your chances of a successful and profitable venture. Keep in mind that each project is unique, and flexibility is essential when adapting to unforeseen challenges.

Securing development finance is a relatively straightforward process. If you’re considering a deeper involvement in this field, our advisors and team at BLG are ready to offer free, no-obligation guidance whenever you require it. Contact us today to find out more.


“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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