Property development isn’t just about finding a top-quality location and watching the money roll in (hence why you’ve ended up here). It’s a complex investment game, and without the right finance in place, even the best-laid plans can crumble faster than a poorly built extension. Just like having to get the mix right and apply it correctly when building, you’ve got to do the research and find the right finance for the project when investing.

Finance is often the trickiest part of the process. You might have a solid vision, a great location, and a team of skilled professionals – but without funding, you’re stuck at square one. If I had £1 for every vision I’ve heard for a business or development I’d be a very rich man. Vision doesn’t pay the bills!

Let me break all of this down for you: why developers need finance, the challenges they face, and how to qualify for it.

Why property developers need finance

Unless you’ve got a bottomless pit of cash lying around (and if you do, why are you reading this?), chances are you’ll need external funding. Here’s where that money goes:

1. Buying land – Before anything else, you need a plot. And you know as well as I do that land doesn’t come cheap. And if it does, there is often a problem with the land such as it’s not suitable for building on!
2. Construction costs – Materials, labour, architects, surveyors, planning permission – it all adds up.
3. Professional fees – Legal fees, planning consultants, and project managers are all essential, but sadly they don’t work for free.
4. Marketing and sales – Once the project is complete, you need funds to get buyers or tenants through the door. After all, you’ve got finance to repay.
5. Bridging cashflow gaps – Developments rarely run like clockwork. Delays and unforeseen costs can throw finances off balance. (I’ve got a whole other blog post on how this can be avoided here).

Choosing the right type of finance

Different projects require different solutions. Here’s a breakdown of common financing options and when to use them:

• Land acquisition finance – If you’ve found an ideal plot but don’t have the funds upfront, land acquisition loans help cover the purchase. Lenders usually base the loan on the current value of the land rather than its potential developed value.
• Development finance – Ideal when you’re moving from planning to building. These loans cover materials, labour, and associated costs, usually released in stages as the project progresses.
• Bridging loans – A short-term option to fill funding gaps. Handy if you’re waiting for planning permission, selling another property, or refinancing a completed project.
• Refinancing – Once your development is complete, you might refinance onto a longer-term commercial mortgage or sell the property to repay the loan.

The right choice depends on your project stage, available funds, and repayment strategy. Mixing the wrong type of finance with the wrong project can cause serious problems down the line.

Common challenges in property development finance

1. Meeting lender requirements

Lenders aren’t handing out money for fun – they want assurances. They will pick apart:

• Your track record – If you’ve got experience, great. If not, you’ll need a solid team and decent money in the bank behind you. Or personal assets that you are happy to put up as a guarantee if anything goes wrong with your repayments.
• Feasibility of the project – They’ll want to see detailed financial projections, build schedules, and exit strategies.
• Loan-to-value (LTV) ratios – The amount you can borrow depends on the value of the land and projected development costs.

2. Managing cash flow

Even with funding in place, cash flow is a ballache. Late payments, unexpected costs, and market downturns can cause absolute havoc on finances. Smart developers keep contingency funds and secure multiple funding streams to stay afloat. A good rule of thumb is that you will always need more money than you think you will on a build.

3. Dealing with planning and regulatory hurdles

Nothing kills a development faster than planning refusals or compliance issues. Legal fees and delays can drain your budget before the first brick is laid. Always factor in time and money for planning challenges. Hopefully with the changes to the planning rules that are coming shortly it should make the planning process smoother with fewer delays.

How to qualify for property development finance

So, how do you convince lenders to loan you the money to get your project started? Follow these steps:

1. Build a strong application

Your funding application should be watertight, including:

• A detailed business plan – Outline the project, costs, timelines, and expected returns.
• Clear financial projections – Show lenders you’ve done the maths.
• An experienced team – Lenders want to know the project is in safe hands.
• Up-to-date management accounts (we can help you with this)

2. Keep a healthy credit profile

If your business (or personal) credit history is a mess, lenders will think twice. Pay down debts, settle outstanding liabilities, and ensure financial records are in order. Lenders aren’t going to be interested if you’ve still got an outstanding phone bill from 2014 – get it paid off.

3. Demonstrate a strong plan to repay the loan, i.e. your exit strategy

How will you repay the loan? Whether it’s selling units, refinancing, or renting, lenders need to see a clear and realistic plan. After all they are not a charity and want to see their capital repaid AND the interest due on it.

4. Provide a solid financial assurances

Lenders need reassurance that their money will get repaid. Offering collateral (such as property or land) increases your chances of securing finance.

Get your finances right, or get left behind

Property development finance is essential for most projects, but it’s not as simple as walking into a bank and asking for a loan. We all know the UK government doesn’t like to make these things easy for us. Understanding the challenges, preparing a strong case, and working with the right professionals can make the difference between a successful development and a living nightmare.

Do your homework, plan ahead, and keep your finances in check. And if you’re not sure where to start, get professional advice – before you find yourself knee-deep in a half-built project with no way to finish it.

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb

Over December, my pipeline of urgent, large projects was shuffled around like the hokey cokey. Deadlines shifted, priorities changed, and what was meant to be a well-structured schedule turned into something far more fluid. Frustrating? Yes. Unexpected? Not really. It’s the reality of working in industries where moving parts – both figurative and literal – dictate progress.

For construction business owners and property developers, shifting project timelines are unavoidable. Fact. The weather doesn’t care about your deadlines (especially in Manchester), materials don’t always arrive on time, and like anything that needs a ‘thumbs up’ from the government, regulatory approvals rarely move as quickly as you’d like. The result? Delays, rescheduling, and, if you’re not prepared, a big financial ball ache.

Why project timelines change in construction and property development

In the construction and property development industry, no matter how well you plan, there will always be variables you can’t fully control. Here are a few of the main culprits:

• Bad weather: Rain, snow, extreme heat – whatever the season, the UK finds a way of complaining and it can put a stop to outdoor work in an instant. Concrete can’t be poured in freezing temperatures, high winds can delay crane operations, and flooding can make a site inaccessible.
• Material delays: With supply chains still recovering from past disruptions, the arrival of key materials can be unpredictable. A delay in steel, timber, or specialist equipment can throw your entire schedule off.
• Labour shortages: Skilled tradespeople aren’t always available at short notice. If a job is pushed back, your best contractors might not be free when you need them again.
• Regulatory hold-ups: Planning permissions, inspections, and compliance checks often take longer than expected, and they don’t always move to your timetable.

When these issues hit, it’s not just a minor inconvenience. Shifting project timelines can lead to expensive problems:

• Contractors booked with nothing to do – yet still needing to be paid. We’ve all got bills to pay and families to feed. (My family member is a furry, four-legged one!)
• Hired equipment sitting unused, racking up rental costs.
• Late penalties from clients if deadlines aren’t met.

So, how do you protect your business from the strain of an ever-shifting timeline?

Strategies to keep your business resilient

While you can’t control the weather or force a supplier to deliver on time, you can put measures in place to reduce the impact of shifting schedules. Here are my suggestions:

1. Flexible contracts with contractors and suppliers

Where possible, negotiate flexibility into your agreements. Can your contractors agree to a notice period for scheduling changes? Can you negotiate material supply terms that allow for adjusted delivery dates without unreasonable penalties? If you can get these terms in writing before you need them, you’ll save yourself a world of stress later.

2. Staggered project planning

Rather than running projects back-to-back, leave extra time in your schedule. This gives you breathing room when delays hit. Yes, it might mean slightly longer timelines overall, but it can prevent bottlenecks that turn into costly problems. Thank me later.

3. Cash flow planning

A well-managed cash flow ensures that when projects are delayed, you’re not left scrapping about to cover wages and overheads. Keep a financial buffer for these scenarios. The last thing you want is to be in a position where a couple of postponed jobs risk your entire business going down the sh*tter.

4. Efficient resource allocation

If a project is pushed back, can you reallocate workers or equipment to another site rather than letting them sit about like a goalie on the bench? Having a plan for alternative work ensures that downtime is minimised and costs are kept under control.

5. Communicating early and often

Good communication with clients, suppliers, and contractors can make all the difference. If you know a delay is likely, notify everyone involved as early as possible. Clients appreciate being kept in the loop, and contractors who know what’s happening can make arrangements rather than sitting around waiting.

What I’ve learned from my own experience

Now, you might be thinking, “That’s all well and good for construction, but how does this apply to other industries?”

Well, the reality is that businesses in any industry – mine included – need to be prepared for shifting workloads and changing priorities. Here’s how I apply the same principles for Cloud Accountancy:

• Flexibility in scheduling: Client deadlines move, priorities shift, and urgent work appears out of nowhere. By keeping some flexibility in my schedule, I can adapt without compromising on service quality.
• Cash flow buffering: Just like a construction business needs a safety net, I ensure I have the resources to handle unexpected work spikes (like tax return season) or quieter periods.
• Clear communication: If a client’s timeline changes, I let them know what that means for them – and for me – so we can manage expectations together. We should all be on the same page.

In the end, no industry is immune to moving timelines. But if you plan for them, rather than just react to them, you can keep your business running smoothly, no matter what sh*t gets thrown your way.

Much like watching Man City play, running a business requires adaptability. You can have the best strategy in place – your own version of Pep’s game plan – but unexpected challenges will always pop up. The key is to stay calm, make smart decisions under pressure, and ensure your business (or your team) stays on track for success. Simple as that.

If you need help putting those strategies into action, give me a shout. We can have a chat about how I can help you and your business prepare for project delays.

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb

What goes into finding a large VAT reclaim?

Let’s not beat around the bush, sorting out VAT isn’t anyone’s idea of a good time (even mine). I’m probably not supposed to admit that as an accountant but you know me, brutally honest. VAT can be long-winded, fiddly and for many busy construction and property business owners, a task that keeps getting shoved further down the priority list until something goes wrong. Funnily enough, that’s the point at which I’m normally called in.

When I’m approached, it’s normally one of two reasons. Either someone had a go at handling VAT themselves and got it wrong, or they trusted someone who wasn’t up to the job. As a result, these are just a few of the situations that my clients are left in:

• HMRC’s knocking with a VAT inspection.
• Penalties have started racking up because of late or missed payments.
• Reverse charge VAT has been overpaid – again.
• VAT returns are missing or incomplete.
• Import VAT hasn’t been claimed properly, i.e. when buying windows or other materials – often because no one’s sure how to do it.

Construction and property VAT is niche and complicated. A general accountant or bookkeeper might mean well, but “well” doesn’t cut it when HMRC is involved. You need a professional with a decent amount of experience, who knows the industry like the back of their hand and won’t shy away from a run in with the tax man.

That’s where I come in.

The process of finding a VAT reclaim

As I’ve mentioned already, finding a large VAT reclaim is slow, disciplined work. There’s no opportunity for cutting corners. The books need looking at closely, the records often need rebuilding, it’s essentially a long process of sorting out what’s what. Sometimes it’s just a minor tidy up, but more often than not it’s straightening out the books and getting on the phone to HMRC. The sooner this is dealt with the better.

Step 1: Rebuilding the books

The first step is getting the records in order. Given the industry, my clients are mainly blokes, so I’m working with incomplete or messy records most of the time (sorry lads, but it’s not our strong point). In an ideal situation, I wouldn’t have to try to pluck invoices and receipts out of thin air or use the bank statement to identify what has happened, but here I am.

Then I’ll review every transaction to make sure it’s been logged and handled correctly for VAT. It’s worse than watching paint dry sometimes to be honest, but someone’s got to do it.

Step 2: Using tools to spot errors

Those that know me know that I’m a big fan of Quickbooks. Everything I need to get my clients straight is in one place. Cash flow, expenses, invoices, profit and loss – you name it. I can keep a close eye on it all, which makes it a hundred times easier to spot a c*ck-up (and sort it out).

Step 3: Reviewing purchases and sales

Something I see on the regular is transactions where VAT hasn’t been claimed because there’s no invoice. If the payment for a product or service that is VATable – and from a known company that is VAT registered – shows up on the bank statement, I’ll make the claim. Simple as that. There’s no need to be leaving (verifiable VAT) money on the table just because a piece of paper is missing.

So basically, my aim here is to make sure VAT has been applied correctly and reclaimable VAT hasn’t been missed.

A real-life example

One of my recent jobs started as a simple VAT clean-up. The client thought their returns just needed a once-over. What I found was that, unbeknown to my client, they were in a messy situation.

• PAYE hadn’t been done correctly, which meant the accounts needed to be restated.
• The company, which appeared insolvent, was actually trading perfectly well once the errors were corrected.
• The director’s loan account (DLA), previously showing a £40k overdraft, was actually £20k in credit. That alone saved the client from a nasty personal tax bill.

By the end of it, the client had a significant VAT refund, a more manageable tax bill, and a set of accounts they could trust.

Why it matters

VAT isn’t optional, and it isn’t simple – especially where construction and property development are concerned. Get it wrong, and HMRC will come knocking and it won’t be a gentle tap. Ignore them, and you’ll lose money. I can’t stress enough the importance of responding to HMRC as soon as possible. Delaying it will not only make matters worse, it will cost you more money in the long-run too.

You could also be missing opportunities for VAT refunds, like my client who had £20k sitting there unclaimed.

The moral of the story: don’t try to do VAT yourself if you’re not one hundred percent on how to. And don’t trust someone who isn’t experienced in your industry. VAT compliance takes time, knowledge, and the right tools. It’s not exciting, but it’s essential.

If you think your construction business could be sitting on a VAT reclaim and you’re unsure how to go about it, or even if you just need a hand with general VAT stuff, I’d be happy to help.

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb