Key Stage 3 of Successful Property Development: BUILD – Pre-construction

Perhaps it’s because of an eagerness to get on with the construction; perhaps it’s having too fixed a mindset; perhaps it’s about the pressure of financing; all too often, pre-construction is a phase we see being given too little attention. Then follows the confusion as to why, during the construction phase, things don’t run quite as smoothly as hoped. There are very good reasons for using this period pre-construction to the full; not least that this is a key stage for maximising value during the actual construction.

Planning conditions

During the previous phase, you’ll have worked with a planning consultant and your design team to come up with the most effective use of the land at your disposal, devising the scheme most likely to please the planning department of your local authority. So, let’s assume planning permission has been granted. There are likely, however, to be some pre-commencement conditions put in place. These may need to be discharged before building works begin.

Planning conditions require approval for particular elements of your property development – for instance, the types of windows or the colour palette of materials – or the way the site itself is used (not just in terms of residential vs commercial, but if there are commercial elements there may be restrictions put in place, for example on operating hours). Meeting those conditions is not a mere tick-box exercise. Site usage restrictions could have severe implications for the viability and profitability of your scheme. Specifying materials to adhere to a planning condition can affect your construction timeline and, of course, costs. We’d hope to be made aware of any likely conditions through our planning consultant at the point of applying for permission, but the devil can be in the detail.

Planning obligations (which you may see referred to as planning gain or Section 106 agreements) are attached to the land itself. When you hand over your completed development, those obligations become the future owner(s)’ responsibility. But for now, they’re yours. Planning obligations are essentially a form of compensation for anything in your development scheme which might have a negative impact, sometimes in the form of making local improvements. Examples might be making a portion of your development affordable housing, providing open space to replace the land you’re building on, or contributing to local infrastructure in some way. They can even involve ongoing maintenance costs. Additionally (but not in terms of financial contribution) or alternatively, you could be subject to a Community Infrastructure Levy (CIL), a local authority charge to fund infrastructure.

Recent changes to planning have reduced some of the hurdles you need to clear and speed up the planning to build phase, but that doesn’t mean anyone should take this important pre-construction phase lightly.

The design team, satisfying conditions and maximising value

The value – and any shortcomings - of your team is about to become clear. The architects, structural engineers, mechanical and electrical designers, contractors, interior designers, ground investigation team and health and safety reps are, inevitably, critical to your final design. They’re the ones who are going to look at any conditions or obligations and brainstorm how to meet any restrictions while still living up to the dream of the design. This is the real precision work of scheme design, working within any scale parameters and conditions to maximise the usability, longevity and added value of the scheme.

It’s also at this stage that your project manager and design team need to set out a clear and robust project plan. You need to know what needs to be done, by whom and by when, in order to deliver a successful project. The entire timeline of the project, with contingencies built in, down to the detail of any land remediation, when each component material needs to be ordered and when and where each specialist and trade is working.

We generally break down this work into three key stages, each of which itself will be broken down into a number of paths:

1. Pre-commencement programme
2. build programme?
3. completion programme.

Utilities

You’ll already have carried out high-level searches for electric, gas, water, drainage and communications in the first two stages of the development. Now, though, you need to draw up very specific costs and build the introduction of utilities and services into your construction timeline. You will also need to have proper drawings drawn and make your applications to the relevant utility providers. This is an obstacle not to be underestimated. Thankfully, these services have become more streamlined over the years, but there are still quite a few applications to be made and coordinated and it can take longer than new developers and investors might expect.

Procurement

With the finalised scheme drawn up and a full programme mapped out, it’s time to nail down your procurement. Ideally, you’ll have tested and trusted contractors and subcontractors with whom you’ve worked before and who have already helped you with ballpark figures earlier in the scheme’s development. Now you’ll need to finalise costs in detail, check subcontractors’ availability and resources against your programme of works, to be sure you have enough time for design tweaks during construction. You’ll need to bring in contractors and subbies for interviews before starting on-site and be sure you’ve worked through any potential hiccups. Getting the procurement process right is absolutely critical for a successful start and the earlier it is completed – without rushing and missing a detail – the better.

Next week, work begins on-site in Key Stage 4: Construction.