Two powerful strategies that can significantly uplift property value…

Written by Jamie Gillispie

Typically, enhancing the value of a property typically conjures images of construction sites, heavy machinery, and extensive renovations. However, there are strategic methods that can significantly uplift property value without any physical development work. Two such powerful strategies are planning gain and title split. By understanding and leveraging these techniques, property investors can maximise their returns and make smart investment decisions.

Additionally, bridging finance can be an invaluable tool in securing deals quickly and refinancing at an uplifted value, providing the liquidity needed to act swiftly and capitalise on opportunities.

Planning Gain: Unlocking Hidden Value

Planning gain refers to the increase in property value that occurs when planning permission is obtained for a new use or development on a piece of land. Even without commencing the physical development, securing planning permission can substantially raise the property’s market value.

Here’s how you can achieve planning gain:

1. Research and Understand Local Planning Policies

• Local Development Plans: Familiarise yourself with the local development plans and zoning regulations. Knowing what types of developments are encouraged or restricted in the area can guide you in making informed decisions.
• Community Consultation: Engaging with the local community and understanding their needs and preferences can help in drafting a planning application that is more likely to be approved.

2. Prepare a Strong Planning Application

• Professional Consultancy: Hire planning consultants and architects to create a compelling case for your proposed development. Their expertise can significantly increase the chances of obtaining planning permission.
• Detailed Proposal: Ensure that your planning application is detailed and addresses potential concerns from the planning authority. This includes traffic impact assessments, environmental studies, and design considerations.

3. Leverage Existing Structures

• Change of Use: In some cases, changing the use of an existing building (e.g., from residential to commercial) can result in planning gain. This often requires less investment than new construction but can still yield significant value increases.
• Extension and Conversion Rights: Utilise permitted development rights for extensions and conversions. These rights allow certain types of development without the need for full planning permission, streamlining the process.

Title Split: Maximising Asset Potential

Title splitting involves dividing a single property into multiple titles, each of which can be sold or leased separately. This strategy can unlock considerable value, especially in properties with large plots or multiple units.

Here’s how to effectively implement a title split:

1. Assess the Property’s Potential

• Survey and Valuation: Conduct a thorough survey and valuation to understand the potential value of splitting the property. Look for properties with separate entrances, large gardens, or multiple floors that can be independently accessed.
• Legal Review: Engage a property lawyer to review the legal feasibility of splitting the title. This includes checking for any restrictive covenants or planning restrictions.

2. Create a Clear Plan

• Physical Division: Plan how the property will be physically divided. This could involve minor modifications such as adding partition walls or separate utility meters.

• Financial Forecasting: Prepare a financial forecast to estimate the costs involved in the title split and the expected increase in property value.

3. Execute the Title Split

• Legal Documentation: Work with your lawyer to draft the necessary legal documents. This includes new leases or freehold titles and any shared service agreements if utilities or access need to be shared between the new units.
• Marketing and Sale: Once the title split is complete, market the individual units to potential buyers or tenants. Highlight the benefits of the newly created units, such as increased privacy or separate entrances.

Bridging Finance: Securing Deals Quickly

Bridging finance is a short-term loan option designed to provide quick access to funds, enabling investors to secure property deals swiftly. This type of finance can be particularly useful when aiming to uplift property value through planning gain or title split.

Here’s how bridging finance can help:

1. Fast Access to Capital

• Quick Turnaround: Bridging loans can be arranged much faster than traditional mortgages, often within a matter of days. This speed is crucial when you need to act quickly to secure a property deal.
• Competitive Edge: With immediate funds at your disposal, you can outbid other potential buyers who may be waiting for longer-term financing.

2. Flexibility and Convenience

• Short-Term Solution: Bridging finance is ideal for short-term needs, providing a financial bridge until you can secure long-term funding.
• Variety of Uses: These loans can be used for a variety of purposes, including purchasing property, paying for planning applications, or covering legal fees for a title split.

3. Refinancing at an Uplifted Value

• Increased Property Value: Once you have secured planning permission or completed a title split, the property’s value is likely to have increased.
• Refinancing Options: You can then refinance the property based on its new, higher value, obtaining a long-term mortgage to repay the bridging loan. This can provide you with better interest rates and terms, and potentially release additional capital for further investments.

Conclusion

Enhancing property value doesn’t always require a hammer and nails. Through strategic planning gain, title split, and the effective use of bridging finance, property investors can unlock hidden value and maximise their returns with minimal physical development. By understanding local planning policies, preparing strong planning applications, assessing property potential, executing legal title splits, and securing quick financing, you can uplift your property’s value significantly.

Investing in real estate requires not just financial acumen but also strategic foresight. By incorporating planning gain, title split, and bridging finance into your investment toolkit, you can navigate the property market with confidence and optimise your investments for the best possible outcomes.

Contact us to discuss.