So what are the most common issues that property development businesses face?
Being a property developer requires taking on many responsibilities at once, particularly when you’re dealing with several projects at once. If you aren’t aware of how to deal with issues correctly, you may be faced with financial and legal troubles.
It is therefore highly important that you are able to identify any potential problems and resolve them promptly before things escalate. Here we discuss some of the most common issues that property development businesses face, including our tips on how to prevent and deal with them.
Over the last few years, it has become more difficult to source primary construction materials. Issues in the supply chain and a shortage of core materials have led to prices soaring, with an increase of 18% predicted this year.
In order to overcome these challenges, you must plan for the impending demand for supplies to avoid falling victim to shortages. Consider pre-ordering materials months in advance and provide a holding deposit to ensure you eventually get the materials you need.
Finding the funds to order these supplies without being able to finish your projects can be difficult, so a business loan could be a suitable alternative to help you out in the meantime. Remember, you may find cheaper suppliers overseas but you don’t want to skimp on quality or end up with materials you won’t be able to use.
Home builder regulations
Multiple new regulations have come into effect for housebuilders in the UK. Due to complaints about the quality of new-build homes, the government is now enforcing stricter standards in the sector to make sure homes across the country are safer.
Additionally, the government is pushing the property development industry to meet sustainability standards in the hopes that we can become carbon neutral in the future. You can only expect to see these pressures increase in years to come.
As a business owner, you should bring about a more robust review process and refine your building codes. Adopting new forms of technology that can automate a lot of the usual processes can help to support this improvement.
Low productivity and labour shortages
Productivity levels in the property development and construction industry have been below the UK national average for a while now. This is based on factors such as reduced profits, low output and late project delivery and goes some way to explaining the failures to meet house construction deadlines.
To improve the productivity of your workers, you need to provide them with the same level of support as other industries. It’s a lot less expensive to try to retain your current employees than hire and train new ones.
The current cost-of-living crisis means your employees could be struggling, particularly since wages and worker compensation in real estate and construction sit below that of the rest of the nation. Speak to your workers and see what would ensure their loyalty, whether this would be improved working conditions or incentives.