Development Finance


How is coronavirus affecting the property market?

By Blog, Development Finance

Coronavirus has had a huge impact on the global economy, with share prices dramatically dropping at the same rate as the 2008 financial crisis and China’s economy is already suffering considerably. However, has the property market in the UK been affected so far? Only mildly.

Minor dips in the housebuilding market

So far coronavirus has only mildly impacted the property development finance market in the UK, with a small decrease in share prices. Housebuilding firms such as Berkeley and Vistry have seen their shares flatline and Crest Nicholson was down by 0.57%. However, the impact of the virus on house prices in the next coming months is not yet known.

A strong February for house prices

February was a good month for house prices, with the average price of a house increasing 2.8 percent compared to the same time last year. According to the recently published Halifax House Price Index, prices were increasing by 2.9 per cent per quarter, meaning that the average price of a property in the UK is now around £240,677.

There has been a stable level of both buyer and seller activity in recent months, far better than has been seen in recent years. Property experts strongly believe that this is because the jobs market is strong, borrowing rates are almost at a record low and the end of uncertainty regarding Brexit. Average house prices in the UK rose considerably in February alone. Many have seen that as a welcome return to a healthy property market. But, this may be at risk now due to the spread worldwide of coronavirus taking place at a rapid rate in the last few weeks.


Coronavirus could threaten UK house prices

Experts believe that if the coronavirus spreads more prominently to the UK, this could pose a significant blow to the housing market.

This is partly based on the fact that political uncertainty in the last two years had a huge impact on prices and the virus could have the same effect in causing falling price growth and transactions.

For example, new builds abroad have already stopped, with new travel restrictions in place meaning that it is more difficult for developers to attract interest from foreign investors.

In the long-term, this could be harmful to foreign investment if such restrictions are in force for a considerable period of time. It will also likely have a knock-on effect on house prices.


House buyers and sellers could put plans on hold

In a survey carried out recently by Benham and Reeves, their data revealed that 17 percent have already put plans on hold for buying or selling property due to the coronavirus.

If fears become more widespread, then market activity may fall once again despite an otherwise strong start to the year.


How is a private road different to a public road?

By Blog, Development Finance

As a property development finance company, we are commonly asked about the main differences between private and public roads. In this guide, we clarify the most frequently asked questions on private and public roads.

What are private streets?

Private streets (also known as unadopted streets) can be classified as roads that are not being maintained at public expense.

What this means is, is that council tax is not used in order to fund neighborhood expenses such as rubbish collections, road maintenance etc. That means councils are not legally required to carry out repair work on private streets should they arise.

This remains the case even if the public has a right of access to this private road.

If repair work is urgently required in order to make sure the street is safe, then the council may ask the residents on this private road to carry them out.


Do I receive lower council tax if I live on a private street?

No, the council will not provide you with a council tax reduction because you live in a building that is on a private street. It is worth remembering that council tax is paid to help with all the public services provided, not just for maintaining streets.


Can a private street be adopted by the local authority?

Yes, it is possible for private street ownership to be taken over by the local relevant authority, providing that they meet certain criteria.

For example, the private street in question will need to have met the local council’s adoption standard. These requirements can vary from authority to authority, but may include things such as improving lighting or curbs in the area.


How to find out if a road is public or private

If you want to find out whether a road is private or public, you can check this with the highway authority for the area in the UK. In most cases, this will be the local council.

The authority in question is required to keep a statutory list, available online, of all the highways that are being maintained at the public’s expense.

This means that if you see a road on this list, it will be a public road. If the road is not listed, it is almost guaranteed it will be a privately owned road, even if there is a public right of way so pedestrians can access it.


Is there a difference between a private road and a private street?

There is not a legal differentiation between the two, it is simply up to the local authority and others to determine which to use.


What are the advantages of private roads?

A private road can have a number of benefits. For example, this may be any of the following:

  • Less traffic and noise
  • A greater sense of community
  • More control over the surrounding area


Are there disadvantages to having private roads?

There are some potential pitfalls to private roads that it is important to be aware of.

For example, it is the responsibility of the owners of the property on that part of the street to maintain them if it needs repairing. If the residents on a private street disagree on the cost, it can cause problems.

Another potential issue can be if the street is not completely maintained. The private road could end up falling into disrepair and may cause safety problems.

Insurance costs also need to be considered, as if accidents occur on a private road the cost of a claim could be very high.


Should you add solar panels to a property?

By Blog, Development Finance

Yes, adding solar panels to a property can be a worthwhile investment and should be considered when you are thinking about property development finance costs.

Adding solar panels is becoming increasingly popular amongst property developers, as more and more buyers become concerned and aware of their environmental impact, and want to find ways of reducing their carbon footprint.

With all this in mind, we take a closer look at the advantages of having solar panels, and the main aspects you need to know about them before making a final decision.


How much do solar panels cost?

On average, solar panel installation will cost you anywhere between £5,000 and £8,000 in total.


How long do solar panels last for?

If you decide to install a solar PV system, you can expect it to last 25 years. It is very important to keep in mind that solar panels are a long-term investment.


The popularity of solar panels

Having solar panels installed can help to increase the property’s overall saleability.

For example, an independent study that was carried out by ING Direct showed that almost half of all prospective buyers stated they were the thing they most desired in a home.

As a result, by tapping into the growing popularity of solar panels you can increase the likelihood of your property selling, as it will be more attractive to potential buyers. It can also help to make your property stand out, and could well be the thing that encourages a buyer to make that final offer.


Energy savings = increased saleability

Solar panels also help when it comes to energy efficiency. With more prospective buyers looking to reduce their energy bills, it means that solar panels are helping to increase property’s saleability in this way too.

In a report carried out by the Department of Energy and Climate Change (DECC) that looked at the impact of energy efficiency and its influence on property valuations in the UK, this was confirmed. The DECC report shows that properties that had energy-saving measures helped boost house prices by a whopping 14% in total.

On average, this meant a property price boost of £16,000.  Therefore, not only are solar panels are a long-term investment, but they are a cost-effective one too, compared to the initial cost of installing them.


Reduced carbon footprint

Not only can solar panels be a worthwhile property price investment, but they also help reduce carbon footprint.


Check the property is suitable for installation

Whilst there a number of advantages to having solar panels, it is extremely important you have made sure that the property is suitable in the first place. This is because not all houses will be suitable for a solar PV installation.

The main things to consider when it comes to installing a solar PV system are:

  • You will mostly need a south-facing roof that has no shade or at least very little
  • The tilt of the roof angle will also be important, affecting how much overall energy that is produced, as well as the money you spend
  • Size of the solar PV system (the size you choose will depend on the roof and electricity used)
  • The FIT rate you can get (remember that these rates reduce every quarter)
  • Where in the country the property is located (for example, a house in south west England will get more sunlight than a house in Northern England)




What is involved in a property survey?

By Blog, Development Finance

Property surveys form an important part of the property development finance process. We take a closer look at what you need to know.

What is a property survey?

This is an inspection of the property’s overall condition, which is assessed by an expert surveyor who visits the building and prepares a property report based on their findings.

The surveyor is able to determine if there are any problems with a property that are a cause for concern for the prospective buyer.


What does a surveyor look for?

The property surveyor will be able to check if there any structural problems with the building, such as subsidence issues or unstable walls. They can also check to see if major alterations or repairs are needed to be carried out (such as fixing the roof) before it can be used.


When is a property survey carried out?

In most cases, once the homebuyers’ offer has been approved by the seller, the property is assessed by a surveyor.

Types of property surveyors

When getting a property survey, you should make sure that the surveyor you have chosen is accredited by one of the following bodies:

  • SAVA or RSPA – the Residential Property Surveyors Association
  • RICS – the Royal Institution of Chartered Surveyors

It is worth remembering that surveyors from these accrediting bodies offer different types of surveys. For example, RICS surveyors provide three ‘levels’ of a property survey, involving a Condition Report, Homebuyer Report, and a Building Survey.


Is a property survey the same as a mortgage valuation?

No, a mortgage valuation is simply a brief assessment of a property to see how much it is roughly valued to be. This valuation is a requirement for most mortgage lenders in order to justify the loan amount.

A mortgage valuation is definitely not as comprehensive (nor can it replace) as a house survey.


What is the cost of a property survey?

The cost of a property survey is upwards from £300. The amount paid will be largely dependent on the type of survey you choose. We will go into further details as to the types of property surveys there are to choose from in the next section.


What types of property surveys are there?

  • Condition Report (survey level one) – the cheapest and most basic survey available. It provides a summary of property defects and potential risks, as well as ‘traffic light’ indications as to the state of different parts of the building.
  • HomeBuyers Report (survey level two – survey only) – details major problems, non-intrusive survey
  • HomeBuyers Report (survey and valuation), – includes a survey as well as valuation and an insurance reinstatement value as well
  • Home Condition Survey – offered only by RPSA, also provides practical information including damp assessments.
  • Building Survey (survey level three) – by RICS surveyors. The most expensive option, but they are extensive surveys and you are given a report.


What type of property survey should I get?

As already briefly mentioned, there a range of property surveys to choose from. The one you should opt for will depend on the depth of the property survey you are looking for, as well as your overall budget.


How long does a property survey take?

It will depend on the level of survey you have chosen and the size of the building which will be assessed.

On average:

  • A level-one property survey may take up to an hour to complete
  • A level-two property survey make take up to four hours
  • A level-three property survey may take up to a full working day to complete


Do I need to get a survey?

It is highly recommended that you get a property survey before you purchase a property. This enables you to make a fully informed decision about the building and the amount you will be willing to pay for it. Depending on the result of the survey, you can also allow for a budget for repairs that may need doing.

It can also be an excellent way to negotiate the price with the seller, depending on the outcome of the survey.


How to Maximise the Value of a Property

By Blog, Development Finance

There are many things households and developers can do to increase the value of their property, from small redecorating jobs to loft conversions and kitchen extensions. Whilst bigger projects will typically add the most value to a property, there are a range of different ways to make the most out your space, regardless of the budget.

Below are a range of different ways to maximise the value of a property:

  • Creating extra parking spaces
  • Adding insulation
  • Loft conversion or extension
  • Small redecorating jobs
  • Sprucing up the garden

Those listed above can help you make the most out of your property, adding to its appeal and further it value.


Creating Extra Parking Spaces

Creating extra parking spaces could add considerable value to a property. In some areas (like Central London) parking is a sought after feature that many are willing to pay extra for or rent out to the public for events or work days.

If the property is located in the right area and has enough free space, it might be good to consider adding some off-street parking to push up its value.


Adding Insulation

Properly insulating a development can have multiple benefits. Not only can proper insulation cut down the cost of your monthly heating bills, it can also make a property more energy efficient, boosting its EPC rating and subsequently its value. See our guide on how to save money on developing a property.

You can insulate cavity walls, as well as the loft/roof to improve its energy efficiency. Additionally, double glazed windows can help to keep heat in whilst also shutting noise out; adding value in terms of energy efficiency whilst preventing damage to value from noise pollution.


Loft Conversion or Extension

Bigger projects, such as a loft conversion or extension, can add significant value to a property. Adding new spaces can make a property more appealing to buyers and also attract buyers who would not have initially looked at the property.

For example, by turning the loft into another bedroom you open up the property to those wanting more bedrooms/space. Adding extra bedrooms (and rooms in general) also increases the value of a property.



Adding a loft conversion can boost your property’s value by 20%


Extensions to kitchens, dining rooms and more can also greatly add to the value of a property, opening these rooms up and making bigger, more attractive spaces.

A loft conversion will typically increase the property’s value by up to 20% and a new kitchen can add 10% to 15% in additional value. This kind of work will typically require planning permission.


Small Redecorating Jobs

Whilst bigger projects usually add more value to a property, the smaller redecorating jobs can also have a big impact on its overall look and appeal. Having leaky taps, broken lightbulbs and peeling paint whilst seemingly small issues can make a property look run-down and unattractive.

Some of the smaller jobs you can then do to spruce up a property are as follows:

  • Fixing dripping taps.
  • Cleaning dirty walls.
  • Removing built up limescale in the bathroom and kitchen.
  • Replacing broken lightbulbs.
  • Repainting walls.

Although some of these features may not seem like much, collectively they can all help to make a property look more attractive, and potentially add value.


Sprucing Up the Garden

Having a tidy and well-designed garden can do wonders to the value of your property, creating an additional space for people to entertain and relax in. Cutting back any overgrown grass and removing any weeds can help to tidy up the area, whilst adding new plants, outdoor furniture, or even small water features can turn it into a beautiful new space in the property.


What insurance do you need when developing a property?

By Blog, Development Finance

It is highly recommended that you have unoccupied buildings insurance in place, and you may also be required to take out a JCT contract (non-negligence insurance) as well as a contractor all-risk policy if developing a property.

As property development finance experts, we will explain these insurance products in further detail in the rest of this guide, to provide you with in-depth information so you can make an informed decision.

Unoccupied buildings insurance

If developing a property that is completely unoccupied, you will need unoccupied buildings insurance. Typically, there will be three levels of cover to choose from. Pick carefully the level of cover to ensure you are fully insured in the event something goes wrong.

  • Level one: this level of cover for unoccupied buildings insurance means that it will only pay out for FLEEA. This stands for Fire, Lightning, Earthquake, Explosion and Aircraft damage only. That means if the property development experiences flood or malicious damage, you will not be able to recuperate costs.
  • Level two: an insurer will cover you for theft, malicious damage, water damage with this insurance policy.
  • Level three: the highest level of unoccupied buildings insurance cover will provide full peril cover should something go wrong during property development.

Make sure you inform your insurer about renovations

When insuring an unoccupied property, inform the insurer when applying that you will be renovating the building. Some insurers will not necessarily make a pay out for major refurbishments if a claim was made or they may decide to implement a cover cap on renovations they would pay out for.

Contractors all risk insurance

If you are the property developer you should also take out contractors all-risk insurance, in order to make sure you are protected against other contractors also working for you.

The main reason for doing this is because you may not necessarily receive adequate cover from the contractors’ insurance policies. In the worst-case scenario, that means you would end up having to pay out for damage caused, out of your own pocket.

By not having this insurance policy in place, you could be putting your property investment at risk.


JCT Insurance  21. 2.1

Also known as Non-Negligence Insurance, it is in place in order to protect the employer (this being the property developer).

This type of insurance will protect the employer against any unforeseen damage to third-party properties, which have resulted due to property development works on your site by a contractor or sub-contractor.

The damage this insurance policy refers to includes things such as lowering of groundwater, vibration, heave or subsidence.

Keep in mind that if you don’t have this insurance policy in place, you could end up having to cover the cost of a claim.







What Doesn’t Need Planning Permission?

By Blog, Development Finance

Lofts extensions, garage conversions and installing roof lights are just some of the things that do not require planning permission. Instead, as with a number of other home renovations, it falls under the Permitted Development category. If something is in this category, it will mean you do not require planning permission from your local planning authority and can get it added pretty quickly, rather than going through the normal loops and hurdles with getting planning from your local council.

Magnet Capital are experts in property development finance and we go into further detail to discuss what work does not require planning permission.

  • Garage conversions
  • Loft conversions
  • Roof lights
  • Solar panels
  • Building a swimming pool
  • Adding a porch
  • Conservatories
  • Single-story extension

However, keep in mind that some Permitted Development restrictions can apply. For example, if the building you intend to renovate is:

  • In a conservation area
  • A listed building
  • You have already carried out a lot of work on this property

If you think any of the aforementioned may be applicable, check with the local authority first.


Why do some things not require planning permission?

The nature of planning permission is for the council and area to protect any of your neighbours from any building work or extensions that you do. Things like personal space, natural light and area preservation are key things for the council to consider whenever you want to add or make changes to your house.

The reason that a lot of things below do not need planning are because they are already within the structure of your house or garden – and do not impact your neighbours or your area.


Garage conversions

If you are simply intending to convert a garden into a living space then no planning permission is required. You will need planning permission it though if it is a standalone garage, which will require consent under Building Regulations.


Loft conversions

Not all loft conversions require planning permission. It all depends on the cubic content. You will usually not need planning if it is under 40cm cubed. However, to add a large loft conversion and extra bedrooms, bathrooms or an office space, will require planning.



Some lofts may not require planning permission – always seek advice from a professional

Roof lights

No planning permission is needed if you want to make changes to the roof through adding lights. Providing that these do not project any further than 15cm from the roof slope, it is acceptable.


Solar panels

Solar panels also fall under the permitted development category in the majority of cases. This is providing that the panels do not protrude any more than 200mm beyond the plane of the wall or roof and it is no higher than the tallest part of the roof.


Building a swimming pool

It is also possible for swimming pools to be considered a permitted development too. However, there are some restrictions. The area the pool covers should be no more than half of the total garden curtilage.


Adding a porch

You do not necessarily need planning permission to add a porch either. It will need to meet the following criteria to avoid permission from the local planning authority:

  • The porch is no taller than 3m
  • It is not 2m within a boundary that is adjacent to a highway
  • Ground area does not exceed 3m



You will not need to apply for planning permission from the council if you are deciding to add a conservatory either up to 10 feet long.



Depending on size, a conservatory may not require any planning permission from the council.

Single-story extension

A single-story extension can be classified as a permitted development if:

  • Similar materials to the original have been used
  • It does not sit forward of the principal elevation
  • If a rear extension on a detached house, it does not exceed a 4m depth
  • If an extension on a semi-detached or terrace, it can not exceed 3m in depth

See also, what work requires planning permission.


Magnet Capital Become NACFB Patron

By Blog, Development Finance

Magnet Capital have today announced that they have become patrons of the NACFB, just 15 months after their official launch.

CEO Ashley Ilsen commented, “I’ve worked with the NACFB for many years whilst at a previous lender and their work is consistently excellent in representing our industry. We as an industry need to band together in order to continue to improve our standards and our practices and I believe the NACFB lead the way in helping to demonstrate how best to do this. It’s a wonderful nod of approval to have been accepted as a patron of the organisation so soon after our launch and a testament to the extensive experience and stellar reputation of the Magnet Capital team.”




As a specialist provider of development finance, we believe that our niche offering will be invaluable to development finance brokers. We are extremely service driven and have a very powerful funding line behind us that most importantly allows us to move very quickly when it comes to assisting with a development deal. We are one of few lenders that meets every single individual that we lend to, which may seem slightly old fashioned to some, however I believe that genuine relationships are built only by face to face meetings.”

Managing Director Sam Howard commented “we have always believed in the power of trade associations, such as the NACFB to bring the short-term finance community together and uphold first class standards across the industry across all the stakeholders. We are delighted to become a patron and be part of this movement.

NACFB Managing Director, Norman Chambers said: “We’re thrilled to welcome Magnet at the latest lender Patron of the Association. Magnet will be familiar to many of our 1077 brokerages as they have previously exhibited at our annual Commercial Finance Expo.

“I’m delighted they have taken the next step in becoming Patrons of the trade body and we very much look forward to working with Ashley and the team in 2020.”

Magnet Capital recently announced that they have added two new recruits to their growing team.


What You Need to Know About Subsidence

By Blog, Development Finance

Subsidence is a term feared by many homeowners. Subsidence is caused when the ground beneath a property sinks, which causes the foundations of a house lower and become misaligned. It can have a considerable impact on both the value, the living conditions and structural integrity of a house.

From a developer’s perspective, it is important to spot the early signs of subsidence and knowing what to look out for. Otherwise, a house with subsidence can plummet significantly in value.

There are various different causes for subsidence. It’s important to know what these are in order to better check a property for this condition. Some of the main cause of subsidence include the following:

Types of Subsidence


Damage Done
Soil Content Having soil with a high clay content can make it more prone to change volume, swelling when wet and shrinking when dry. This can cause the ground beneath the foundations of a house to become unstable, and lead to subsidence.
Leaks When there is a water leak around the foundations of a property, this can have a significant impact on the soil, causing it to swell or wash away depending on the soil content. This can alter the level of the ground beneath a property’s foundations, further causing subsidence.
Trees and Shrubbery If a house has trees and large shrubbery too close to its surroundings, this can drain a significant amount of moisture from the ground underneath the house, altering the level of the ground and causing the property’s foundations to sink.
Mining (Location) Houses that are built close to an old mining site can also be at risk of subsidence. This is due to the material in the mining site decomposing, altering the ground and impacting the structural integrity of nearby houses.

Whilst understanding the causes of subsidence can help to prevent it, spotting the signs of subsidence are also vital in helping to protect a house from the condition as best as is possible.


How to Check If a Property Has Subsidence

There are numerous ways subsidence can present itself, the main ones being as follows:


  • Cracks around doors and windows – cracks from subsidence can appear both outside and inside the house, they are typically found near a property’s doors and windows, and spread significantly faster than other types of cracks.


  • Crinkling wallpaper – when wallpaper begins to crinkle this can also be a sign of subsidence, typically being around where the wall meets the ceiling.


  • Doors and windows jamming – when you begin to have difficulty opening or closing any doors and windows to a property this could be due to subsidence; the sinking of the house’s foundations cause these features to become misaligned.


When spotting signs of subsidence, it’s vital that these are checked by a surveyor, who can inspect the property to confirm this.


If you see cracks in walls, you could be dealing with subsidence

What to Do If My Property Has Subsidence

If you think your property is suffering from subsidence, it’s important to contact your buildings insurer as soon as possible.

Typically, the quicker subsidence is noticed the easier it is to manage. Your insurer will organise for a surveyor to come round and inspect the property. The surveyor can then confirm whether it is subsidence or not.

You can get insurance for subsidence, however most standard insurers will not cover a house that is, or previously has, suffered from subsidence. Therefore, when looking to buy a house it’s important to learn about its history, and whether it has at any point been affected by subsidence.