Starting a property development business

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If you enjoy DIY, and you’re good at it, starting a property development business can be an attractive prospect. While the property market has been through an unsettling period things are now looking up.  Property developers and property prices are forecast to rise year on year moving forward.

How to get started

Many people are setting up a development company while also working full time for an organisation. This can mean that you have a steady income while work is being completed, but it will also probably mean that things don’t move along as quickly as they otherwise might. Whether you choose to set up full time or you’re doing it in the evenings you’ll need to work what is the best structure for setting up a property company. You could work as a sole trader, go into a business partnership or set up as a limited company. A limited company set up allows you to limit your own financial liability, benefit from tax advantages, claim your tools and equipment through the company and pay yourself a lower wage, supplemented by dividend payments.

How to start a property development business

To start a property development business, you’ll need to:

  1. Pick a name for your company
  2. Register your company with Companies House or a formations agent
  3. Register your business address
  4. Appoint your directors and a company secretary
  5. Allocate shareholders and shares
  6. Submit your memorandum and articles of association
  7. Register for corporation tax



As a property developer there is no requirement for a licence. However, once you come to letting your property, for instance if the property will be let as shared accommodation to more than one household (it’s a three storey house with shared kitchen facilities and two families living in it), you will need to apply for a House in Multiple Occupation Licence. You can find out more about licences you may need from the Government Licence Finder.

The legislation and regulations you’ll need to comply with will vary depending on the type of property you’re working on and the extent of the renovations you’re doing. You can check these with your local council.

With older properties you’ll need to consider the possibility of asbestos, a group of fibrous silicate minerals considered highly dangerous, being present. It’s important that you understand your obligations here and how to dispose of it safely.

You’ll also have responsibilities for health and safety and you’ll have duties as a client under the Construction (Design and Management) Regulations 2007 (CDM 2007).

As a business your portable electrical equipment, such as your drills, saws and sanders, will also be subject to Portable Appliance Testing (PAT) by an electrician every two years.

If you employ people you’ll also be obliged to comply with Health and Safety legislation from the Health and Safety Executive (HSE) and you’ll need to take out employer’s liability insurance too.

You may also need public liability insurance and professional indemnity insurance. Some insurers have specific policies designed with property developers in mind, which may provide you with a more cost effective insurance package.


Qualifications needed

Unless you’re planning on carrying out all works yourself you won’t need any professional qualifications for starting a property development business and learning on the job is normally your best form of training. However, if you plan to carry out specific activities, such as electrical work, it’s better to employ a professional.



If you’re starting a property development business, you’ll need a large amount of upfront capital to start out in property development, in effect paying for the property you’re developing in advance of starting work.

These will vary greatly depending on the location of your chosen property and your planned renovations. If you’re planning to carry out a lot of the work yourself you’ll need to have the tools to do this, while if you’re planning on employing professionals to do certain jobs you can expect them to provide their own tools and equipment. You will however need to have the capital to pay them for their work.

You’ll also need to consider that you may not realise the return on your investment immediately. It could be several months before your property is sold or let, even after your renovations have been finished.

Your business costs may include:

  • Purchase of property to renovate.
  • Fixtures and fittings for that property.
  • Changes or installation of utilities and services.
  • A secure and reliable business vehicle.
  • Tools and equipment for your work.
  • Insurance.
  • Contractors’ costs.
  • The costs of employing staff.
  • Solicitors fees.
  • Stamp duty and land search.


Starting a property development business as a limited company

When setting up a property company as a limited company you’ll need to register with Companies House. To save on time and money you can choose to do this through a formations agent. At The Formations Company our specially negotiated rates mean the process can cost even less than the price of your Companies House registration and your formation can take as little as 24 working hours to complete.


Not ready to register as a business yet? Check out our handy company formation guides for step-by-step advice before you take the plunge.

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