Terms & Conditions

[peham28]

My head is going to explode so need help
A private property developer has bought a property in our area for £420,000.00. They are then adding on the following

SDLT £29,500
SDLT on lease £2506.00
Legal Fees £47200.00
Professional fees £40000.00
Development/cons costs £ 20000.00
HA fees £17056.00
Rent free period £10660.00
Contingency £5000.00

Total Development costs £591922.00

They then add a 8.9% developer profit and state the total project costs are £644717.00

They then add a annual yield by owning landlord of £6.61%, making the annual lease rent £42640.00

What does a developer profit have to do with the rent?

I understand the costs of buying and getting the property ready for specified/supported accommodation make up the lease. When I questioned them they said this is a hypothetical figure for when they sell the property as they expect a return on it.

Does this make sense to anyone

[charles_reid]

A developer has to factor in the yield on investment when working out the rent that they charge. This will be the case for any landlord for them to determine if they can make a profit from the return on investment.
I can understand that by using the phrase “hypothetical” this will cause confusion. This is just the expected amount they will have to make to make the scheme feasible. I think what they mean is that when they try to sell the property they have to show a prospective buyer how much of a return they will receive if they purchase it.

[peterdelamothe]

What is missing here is whether the Council area needs this resource. The answer often is no. But this is not something the developer has to consider….the Council and thus the taxpayer has to pick up the tab anyway. It is bizarre really. No strategy to consider who needs what and where. What shortage there is in specific category. A chaotic system.

What this example demonstrates is how little interest there is in providing a service to vulnerable people. It is simply about making as much money as possible.

[John Boxall]

peterdelamothe wrote:

What is missing here is whether the Council area needs this resource. The answer often is no. But this is not something the developer has to consider….the Council and thus the taxpayer has to pick up the tab anyway. It is bizarre really. No strategy to consider who needs what and where. What shortage there is in specific category. A chaotic system.

What this example demonstrates is how little interest there is in providing a service to vulnerable people. It is simply about making as much money as possible.

Agree

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

Wilkins Micawber, Ch12 David Copperfield

[leonardpayne]

peterdelamothe wrote:

What is missing here is whether the Council area needs this resource. The answer often is no. But this is not something the developer has to consider….the Council and thus the taxpayer has to pick up the tab anyway. It is bizarre really. No strategy to consider who needs what and where. What shortage there is in specific category….

A somewhat biased piece of rhetoric IMHO

What you fail to address is the abject failure of LA’s to address their lack of work on the homelessness issue.

A challenge for you. Do you think that ALL supported exempt accommodation should be policy driven by LAs? Is there no room for charities for example to help?

i understand your anger at rogue actors but I think you’re coming at it lop-sided if I may say.

[John Boxall]

It seems to me though that there is a sensible question to be asked as to how much Supported Accommodation is needed, where it is needed and does it meet peoples needs.

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

Wilkins Micawber, Ch12 David Copperfield

[leonardpayne]

Adding to my previous …..

The new Supported Exempt Accommodation Act will require LA’s to do a complete analysis of the ground in their areas and also to come up with a cunning plan to monitor and licence. That should address the issue of whether a LA needs the resource

Fair comment John Boxall, but until LA’s get to work, the question is begged – “Who is asking the questions”, “what are the questions” and are they qualified to answer?

• This reply was modified 4 months ago by leonardpayne.

[John Boxall]

Well, Leonard the answer is 42, now what is the question?

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

Wilkins Micawber, Ch12 David Copperfield

[peterdelamothe]

Leonard…of course there is room for charities to help. But I really dont think there was ever an expectation that hedge funds would get so involved because the return is so high.

The key idea is to help vulnerable tenants but the overwhelming evidence is that many schemes are set up to make as much £ as possible and tenant welfare is a long way behind.

[Author]

Posts