Property development consultants: guide for investors and developers

Property development is a proven route to generating long-term wealth. It’s not easy though. Every project presents a diverse range of challenges from working within strict planning rules to managing complex build schedules.

Mistakes can delay completion for months and significantly dent the profitability in a project. To better manage the process, many investors and developers work with property development consultants.

In this article, find out what property development consultants do and the value they offer. Then, use our checklist to find the right consultant for your property projects.

What is a property development consultant?

Property development consultants work with clients (investors, developers and landowners) to maximise profit and minimise risk on building projects. Their role is to help clients avoid costly errors and overcome hurdles that could delay completion.

Some are end-to-end delivery partners, managing a project from the initial idea right through to completion and beyond. Others help out at certain stages: for example, a firm may specialise in areas like early-stage feasibility, planning constraints and funding.

How to choose a property development consulting service: checklist

Many developers feel that there are weaknesses in their processes that stop them achieving their investment goals. That could include getting projects past planning, finding a broader range of property development funders or managing the day-to-day build. 

Property consultants bridge these gaps, so they can focus more time on securing the best deals and growing their portfolio. Consultancies offer one or more of the following six services. Choose the firm that offers the support you need in areas where you need more assistance.

1. Project feasibility and profitability assessment

A project may look promising on the surface. But, there may be hidden costs or constraints that could reduce or even wipe out any expected returns. 

Property development consultants run feasibility reports and profitability exercises to determine the financial viability of your proposed project.

To do this, they analyse:

• Project costs: This includes land and building prices, estimated build costs, professional fees, finance charges and council levies like CIL and Section 106 payments.
  
• Final value: They estimate your project’s potential Gross Development Value (GDV) by analysing local market trends.
  
• Contingency allowance: This is an allowance to cover unexpected issues and unforeseen costs. This can include last-minute council demands or site conditions like groundworks or utilities.
  
• Profit calculation: They estimate the level of return you’ll achieve. They factor in scenarios beyond your control like cost rises and lower final values to work out how resilient the project is to risk.

Example: A developer wants to build a mixed-use property with 12 buy-to-let flats above a ground-floor shop. [Related article: Planning Use Cases: Rules And Changes Explained]

After factoring in all outgoings, the consultant estimates a total project cost of £4.1m for the mixed-use scheme. They believe the flats will sell at £3.9m and the retail unit at £750,000, meaning a potential profit of £550,000, a return on cost of 13.4%.

However, the developer decides not to proceed with the mixed use project. That’s because they don’t feel there’s enough leeway to protect against, for example, a 15% rise in labour and materials costs and still deliver a healthy-enough profit.

2. Strategy and design

The consultant’s role is now to turn the estimated costs in the feasibility study to a detailed cost plan.

To do this, they speak with architects and engineers to create more detailed plans, checking planning requirements and Building Regulations. They also start to get supplier quotes. 

At the end of the process, they re-run the budget to confirm the expected level of return before you take the next step: applying for planning permission.

At this stage, your consultant provides:

• A full brief and project strategy: You agree on the final design, timeline and budget. They confirm what planning route to take, setting out the key points where you make important decisions like on whether to move ahead.
  
• A compliant design: The consultant works with your architect on the drawings to make sure they meet all key Building Regulations. This includes areas like fire safety, sound insulation and energy efficiency.
  
• An updated financial plan: They get quotes from suppliers to replace previous estimates as well as help from a Quantity Surveyor (QS) to firm up the cost plan. Now, you’ll have a more reliable budget forecast and can re-run the numbers to confirm profitability.
  
• A plan for the build: Your consultant will run the contractor selection process for your project and recommend a procurement route. They’ll also plan phasing and site logistics to reduce risks like cost overruns as well as potential delays.
  
• A master planning phase: Master planning is a big-picture plan for larger sites which includes access, building heights, uses and when you’ll deliver each project phase. This is ideal for strategic land purchases because you show the council how the site can come forward in stages while remaining viable in planning and financially.

Example: As a property sector, houses in multiple occupation (HMOs) are currently in demand. An initial study for converting a commercial property to a 6-bed HMO shows a path to £150,000 profit.

However, during the detailed design stage, the architect and consultant find a way to add a seventh bedroom.

This adds £15,000 to the build cost but increases the final value (GDV) by £45,000. The investor greenlights the project as it shows a 20% uplift in profits from the original estimate.

[Related article: HMO Conversion: Planning Permission, Costs & More]

3. Planning permission

At the planning permission stage, your consultant’s role is to secure the consent required to start your project. They prepare a thorough and professional application, and then manage interactions with the council. Their application should take account of local policy, likely objections and recent precedents so it has the best chance of succeeding.

The property development consultancy is responsible for:

• Creating the application pack: They bring together the documents the council wants to see, like drawings, expert reports and supporting statements, and submit them with your application.
  
• Communicating with the council: Your consultant deals with the local authority’s planning officer, responding to their queries and managing feedback from neighbours and other agencies like Environmental Health.
  
• Negotiating the conditions: Approvals often come with conditions attached. The consultant calculates CIL correctly and negotiates Section 106 obligations to minimise cost and delays.
  
• Tracking progress: They manage the application right through to a formal decision. They aim to keep everything moving forward within statutory timelines, normally eight to 13 weeks.

At each step, your consultant’s target is getting approval while protecting the profitability of your project.

Example: You’ve engaged a commercial property development consultancy to turn an industrial unit into offices with a café at the front on the ground floor. The project has the potential to deliver a return of £1.3m (27.6%).

The council wants a more inviting shopfront and to shift the main entrance. You comply with their request and find that, by moving the main entrance, you free up an extra 60 square metres of lettable space. This adds an extra £100,000 to the project cost but you decide to proceed because this change pushes GDV up £200,000 and profits up 10%.

4. Building Regulations and technical design

Now your property development consulting team has got the project passed planning, they prepare highly detailed technical designs for legal compliance and the construction phase. 

At this point, they consult experts like structural engineers and energy assessors with the aim of creating a complete ‘instruction manual’ for the building firm you use. It’s here that you get price certainty on your project. Since 6 April 2024, private “Approved Inspectors” are called Registered Building Control Approvers (RBCAs), and inspectors must be registered as Registered Building Inspectors (RBIs).

At this stage, property consultants for developers will:

• Draw up a technical pack: This contains the detailed drawings and specifications required to meet Building Regulations. They cover everything from fire safety and drainage to sound insulation and energy efficiency.
  
• Arrange further surveys: The consultant calls in experts to perform detailed structural, ground conditions and utilities surveys. They’re aiming to identify potential issues that could become expensive problems during the build.
  
• Fix the scope of work: With a definitive scope of work and a detailed list of items to include in the build, construction firms know exactly what to quote for. This means all estimates are like-for-like comparisons.
  
• Engage with Building Control: The consultant handles the formal Building Regulations application, agreeing an Inspection Service Plan with the local authority building control team or an RBCA before work starts.

Example: An investor identifies a development opportunity to convert two barns on agricultural land into offices. After a few revisions, it finally gets through the planning.

The initial cost plan is £3.2m. Surveys later reveal weak foundations that will cost £120,000 to put right. The consultant value-engineers, finding £70,000 worth of savings on cladding. This puts the final cost plan at £3.35m.

After going out to tender, one builder returns with a price of £3.36 million, just 0.3% more than the revised estimate. This level of accuracy in the financial projections gives the investor the confidence to proceed.

[Related article: How To Find The Right Builder? Learn How To Avoid Cowboy Builders]

5. Construction and project management

Now you’ve found a builder, the consultant’s role is to be your representative on site. They manage the live construction phase, ensuring the project meets the agreed build quality, completes on time and stays within budget. They also manage in-progress course changes to minimise any delays and potential cost overshoots.

During the build, the property consultant for your development:

• Handles the financials: They track all spending, including approving payments to the builder based on their progress. They also manage on-site changes to plans (like upgrades to specs) so they don’t erode your profitability.
  
• Manages the schedule: Your consultant makes sure that materials and tradespeople needed on site are there at the right time. They also solve on-site issues like weather delays and supply shortages to keep the project on track.
  
• Oversees quality and compliance: They’re there for all site inspections and checks. Key responsibilities include making sure the work meets the required standards and getting Building Control and warranty sign-offs.
  
• Acts as your point of contact: Consultants provide regular updates on progress and all site communications. You stay in touch without having to manage day-to-day queries and issues on site.

Example: The agreed contract sum for the barn conversion was £3.36m. During construction, the tenant who’d signed a long-term lease wanted a design change that would cost £60,000.

To offset this, the consultant revisits some of the specifications, swapping out a decorative feature for a more affordable one. They also find an approved-equal, less expensive lighting system. This claws back £40,000 in costs without compromising quality.

So while there was an increase in budget, it was small and the hit on profits was minimal.

6. Completion and exit

Now is when the investor can turn the finished building into an asset they can sell or rent out. Once the consultant has managed the formal handover from the builder, they complete and submit the necessary legal and compliance paperwork. Many can also help their clients execute their exit strategy.

To wrap up the project, your consultant will:

• Oversee the practical completion process: Pre-handover from the builder, the consultant manages the final snagging list. They also make sure build quality is to the standard you require throughout.
  
• Close out all compliance: As well as getting the final completion certificates from Building Control, they gather the essential documents you need for future building management, like safety files and warranties.
  
• Present to market: The consultant collects all necessary legal and technical information that buyers, tenants or lenders look for when making decisions. They may also help with the promotion of any disposal.
  
• Complete the financial exit: This is the final step of the process. That could be arranging new finance like an HMO mortgage or dealing with estate agents to sell or rent out the property.

Example: The barn conversion project cost a total of £3.38m. The investor had financed the exercise with development finance. Pre-letting agreements signed with tenants meant the building would generate £325,000 per year.

The consultant valued the building at about £4.3m based on tenant income. The investor decided to place the property on the market and achieved the selling price they wanted.

This results in a final profit of £880,000, a 26% return on cost before costs and fees.

Working with experienced architects that stay with you throughout the project

Property development is a complex, multi-stage process, starting with a feasibility study. It ends much later with re-finance, a sale or letting out your property. Even for experienced investors, managing all the moving parts can be a challenge.

We’ve seen how property development consultants can help. While some investors only need help at certain stages, others appreciate the assistance throughout the entire journey.

Examples of where HMO Architects have helped include:

• Mill Street, Birmingham (11 units): We converted a complex, conservation-area former retail/office building into 11 attractive, fully compliant flats. Each flat was fully integrated but had its own personality. Residents also benefit from a communal workspace. The property value increased from £800,000 to £2.6m and rents went up from £5,000pcm to £18,000.
  
• Devonshire Road, East Sussex (22 units): We turned a prominent former NatWest corner building into a mixed-use scheme with 22 HMO rooms for a veterans’ charity, plus offices. Each room was en-suite and the property was complemented by a shared communal area and kitchen. The design also included the installation of a lift to enhance accessibility. Value soared from £500,000 to £1.2m and rent from £4,500pcm to £11,000.
  
• High Street, Cambridge (2 units): We re-planned and refitted a semi-detached cottage for holiday serviced accommodation. We balanced the needs of Building Control standards with the owner’s wish to create a “topical vibe”. The building is now worth £900,000 and rental income has gone up from £1,800pcm to £3,800.

At HMO Architects, we provide a start-to-end process for clients, with services including:

• Investment strategy calls: Ryan Windsor, our Investment Director, started building his own extensive property portfolio when he was 17. Since then, he’s consulted on over 2,200 projects. When you get in touch, ask Ryan about his BRRR method and how to use it as your investment strategy.
  
• Feasibility study: Giovanni Patania, our Architect Director, and his team advise directly on all pre-buy and design feasibility issues related to your property project. This includes factoring in compliance costs like fire safety measures and carbon monoxide alarms.
  
• End-to-end service: We provide architecture design and planning to building regs and interior design. The experts you need are all in one place.
  
• Wider network: Plug into our pool of trusted professionals, ranging from letting agents and QS to specialist builders and structural engineers. Access experts like property development finance brokers to arrange a competitive HMO mortgage at the best possible mortgage interest rates. 

Partner with us on HMOs, flats, holiday lets and homes you want to rent out. For all other property development projects, please contact our sister firm, WindsorPatania.

To contact us, please call 01223 776 997 or email us. We look forward to hearing from you.

Frequently Asked Questions

What is the first step in a property development project?

Every project should start with a feasibility study to assess the development potential and financial viability of the site or building you wish to bring forward. 

The advice a property development consultant gives you will help you make an informed decision on whether your project is viable, based on the costs, any planning permission risks and the potential returns.

How is development land valued?

When valuing development land for a site purchase or project feasibility study, the factors you should take into account include its physical condition, any planning conditions (including S106) contributions, likely building costs and professional fees.

How complex is the residential planning permission process?

The residential planning permission process is complex and takes a long time to complete. Demand to build new homes in certain regions like London and the South East means councils are stricter and competition for approvals is higher. 

Choose an architect firm or property development consultancy with proven local knowledge of borough-specific policies and planning committees to represent you so you have the best chance of success.

What are development agreements?

In the development process, a development agreement is a contract that contains obligations on a developer to complete a building project on behalf of someone else, like an investor or landowner. 

The agreement provides a project structure, reducing legal risk and ensuring financial security for both sides. Issues covered in a development agreement include timings, payment schedules, build quality and risk protection. The agreements form a key part of business plans used to secure a loan on a project.