Sunday, December 16, 2007

Are YOU heading for a building problem?

THOUSANDS of amateur developers are “heading for problems” by copying projects on reality television shows, an industry expert warned today.

Instead of doing jobs properly, they are being misled by TV shows which pretend making money from property is child’s play. But as thousands copy what they see on screen in the hope of making a quick buck, a growing number are setting themselves up for heartache, according to Peter Vinden, chairman of construction consultants The VindenPartnership.

“These shows make it look like making money out of developing property is a piece of cake, but it is anything but,” said Peter.

“So many people are watching these programmes and thinking, ‘I could do that’ when they can’t, that thousands are simply heading for problems.”

The success of property programmes has created an army of amateur developers keen to make money from renovating old houses.But with the property market across the UK currently static or declining, the margins for error are becoming ever smaller.

Meanwhile, record debt levels mean that many amateur developers, at or close to their borrowing limit, are unable to budget for complications or fund emergency repairs. As a result, it is even more important that they make the most of what advice is available as early as possible.

As a result, one of the services the Bolton/Nottingham-based firm can offer is a free project health check, run in conjunction with the Royal Bank ofScotland. Vinden’s team includes specialists in surveying, building, insurance and the law.

“We are seeing more and more people who think they can turn their hand to developing property, when they really don’t know what they are doing,”added Peter.

“That trend is a direct result of the number of property programmes there are on television making the whole process look very easy for even a complete amateur.

“We saw one case where a developer thought he was going to make £300,000 profit from building six new houses.

“His sales prices were very realistic but he had completely underestimated the problems and costs of building the houses in the first place. Our report went through the whole project, looking at everything from building costs to the best ways of going about the scheme, and concluded that he would most likely lose money on the scheme. He wasn’t very happy but it saved him a lot of money and heartache in the long run.”

Mr Vinden, 42, added that while some shows - such as Channel 4’s PropertyLadder, in which Sarah Beeny gives frank advice to often hapless developers– be have responsibly, other programmes do not always follow suit.

“Millions of people tune in each week to watch and a large number go away wanting a piece of the action,” he said.

“But while these programmes get great ratings, the people behind them don’t see the hundreds of people losing large sums of money through thinking that making cash out of property is easy. It is not.

“If these shows could do one thing, it should be to encourage developers to seek professional advice at the outset.”

Dave Jones, Director of Commercial Banking for RBS Bolton and Wigan, said:“We have already worked with The Vinden Partnership on a number of project health checks and the feedback from customers has been excellent.

“Vinden have a wealth of expertise and a well earned reputation for professionalism and integrity within the construction industry.”

Among the most common mistakes made by amateur developers are:• Developers underestimate the cost and time taken to do even straightforward jobs.• Not spotting which jobs can be done by the developer, and which need professional skills.• Not realising that, when borrowing money from institutions accredited by the council of mortgage lending, properties need to meet certain building regulations – making the finished property impossible to sell.• Determined to make a project work on low costs, amateur developers refuse to seek professional advice until it is too late.

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