With developers in parts of West London unable to build new homes until 2035 due to the lack of electricity supply, it is imperative for local authorities, developers and the built environment industry to future proof their cities by investing in decarbonisation projects.

AESG, an international consultancy, engineering and advisory firm, in collaboration with the LDN Collective (a network of built environment experts & creatives fighting to improve people’s lives & the planet’s prospects) and West London Business (representing the private sector in the UK’s largest sub-regional economy) have released new research that identifies 10 principles for planning and designing net zero neighbourhoods, with 10 global case studies to learn from, and a summary of the latest innovations accelerating change. The report aims to give confidence to governments, city planners, investors and developers to embrace more radical innovation, explore new funding models and skill up to retrofit at scale, in order to future-proof developments for a more resilient future.

The research highlights 10 key areas of focus exemplified by 10 neighbourhood scale projects that have been built around the world with evidence-based outcomes. The focus areas range from optimisation; renewable technology; renewable energy; heat networks; local authority engagement; socio-economic benefits; demand response and energy storage through to funding mechanisms, digitisation and automation.

Commenting on the piece, Max Farrell, Founder & CEO of the LDN Collective and Chair of Built Environment for West London Business said

“Addressing climate change at the neighbourhood scale is a complex challenge that can only be done collectively, and it needs immediate and radical action to be taken. Within the UK, government at every level has committed to achieve net zero within the next 15-30 years, yet local authorities face significant challenges funding the transition. We hope this report will help provide clarity on the principles that need to be followed, with examples of outcomes from those who have already embarked on the journey to net zero”

Niall Bolger, CEO of the London Borough of Hounslow and Co-Chair of the Cities Commission for Climate Investment (3Ci) said;

“We commend West London Business, the LDN Collective and AESG for providing leadership and guidance that will help support the UK’s vision for achieving net zero, building on the business case published by 3Ci, and raising the bar for sustainable neighbourhoods worldwide.”

The report, developed by AESG’s globally renowned team of sustainability experts, and supported by West London Business and the LDN Collective, focuses on the principles that achieving net zero neighbourhoods requires – planning a community development at the macro-level, understanding interdependencies of systems and implementing solutions to mitigate the risks.

Briefly summarising the insight and guidance informed by the case studies, Sam Luker AESG’s Associate Sustainability Director said.

“Approaching Net Zero from the Neighbourhood perspective enables a more holistic and attainable approach to the decarbonisation of our urban environment. By bringing together a mix of residential, retail and other commercial uses, we are able to create scale and most importantly, a revenue stream that unlocks private capital for decarbonisation projects. Furthermore, the Net Zero Neighbourhoods approach necessitates collaboration between the public and the private sectors, both of which are working towards the same goal. Innovative funding mechanisms and a focus on socio-economic value facilitates community buy in and the roll out of decarbonisation projects. This enables sustainable design measures to be implemented at the neighbourhood level, facilitating the UK’s bottom up transition towards Net Zero”.

The ‘Net Zero Neighbourhoods: Redesigning Neighbourhoods for a Low Carbon Future‘ Report is available as a free download from: www.westlondon.com/netzeroneighbourhoods-report

The post Net Zero Neighbourhoods Report Launched To Further Uptake for Low Carbon Future first appeared on Property Insider.

First of all what are the advantages of buying at a property auction?

Auctions frequently offer an opportunity to purchase property at below market value, as would be achieved in a normal open market sale.

A purchase at auction is final at the agreed price. The seller cannot back out. You cannot be gazumped.

Auctions offer a quick method of purchasing property and a guaranteed completion date.

And what are the possible disadvantages of buying at a property auction?

You cannot guarantee that you will be able to purchase a property at below market value, as the price depends on bidding on the day.

The purchase is final. The contract of sale is agreed on the day.

Many properties offered at auction are ‘problem properties’ which cannot be viably sold by private treaty. (This may often be because they are not mortgagable as they stand.)

Here’s a quick briefing on sourcing successfully at property auctions right now:

Contact all the auction houses who auction property in the area you’re interested in. Sign up to receive their catalogues (most of these are available online now) so that you receive details of all properties coming up for auction.

If you’re looking to buy in the regions check both with your local auction houses and the main London property auction houses – many of them also sell regional properties.

The first thing to do when you see a property you’re interested in – do the maths. Estimate what you could sell the property for, deduct your costs, then see if the guide price is in the ballpark. Estimate what you could rent the property for, and calculate if the likely buying price will offer a viable yield.

Tip. Overestimate your costs and overheads but underestimate your likely selling price or rental value.

Understand guide and reserve prices. Guide prices are only a guide to the price the property might sell at, and are frequently exceeded. Properties sometimes sell for less, but less frequently. The actual price achieved depends purely on the bids made on the day.

Guide prices are not reserve prices – the price below which a property may not be sold.  However, reserve prices are typically set within the guide range indicated (eg.£150,000-£170,000) or no more than 10% above a single figure guide (eg. £170,000).

Always inspect the property. Don’t buy sight unseen. (There are some very distressed, distressed property lots offered at auction!) Only experienced investors who can afford to take the financial risk should ever consider buying sight unseen.

Make any checks you wish to do on the property now – there is little point in doing them after you have bought the property at the auction. If you wish to have a survey done, take expert advice on condition, get estimates for repairs and renovations etc. do this well in advance.

Study the legal pack. The legal pack gives all the terms, conditions and any restrictions applying to the property and the sale.

You do not have to take legal advice to the legal pack but since it constitutes the basis of a legal contract of sale it is advisable.

Have your finance lined up before the sale. If you are relying on mortgaging the property being purchased to raise the necessary finance then, although there are some mortgage brokers who offer to arrange finance subsequent to any auction purchase, it is highly advisable to do this before.

Allow for any extra buying costs. These might include a buyer’s premium, administration charge or search pack fee which in some case can be a significant proportion of the cost of the property. Also allow for your own legal fees. In some cases you may be required to pay the seller’s legal fees too.

Attending the auction. You don’t necessarily have to attend an auction to bid on repossessed properties. Most auctions allow you can to make a proxy bid through the auctioneer, to bid by phone or online. (All of which need to be arranged in advance.)

There’s by and large no secret to bidding at auction. Here are a few pointers: When the sale begins just bid up to whatever you are willing to pay. The auctioneer will normally offer each lot by suggesting an opening bid. If no one bids, make a lower opening bid if you like. Bidding will normally rise in units suggested by the auctioneer (eg.£1,000) but it doesn’t have to, you can bid a fraction of that unit if you like.

A declaration by the auctioneer that the property is ‘in the room’ or similar indicates that the reserve price as been exceeded and the property will sell.

If a property fails to sell in the room because the reserve price has not been reached it is normally acceptable to make an offer at or above the last bid if you are still interested in buying – do this direct to the auction staff (not the auctioneer) as soon as possible.

When you buy at auction the sale is final and is completed on the date agreed which is usually 28 or 30 days after the auction. In some cases the seller may dictate a shorter or longer completion period – always check.

It is highly advisable to have a solicitor lined up and ready to act for you, and their confirmation that they will be able to carry out the necessary contract work within the specified period, before you actually bid.

While most property auction purchases go smoothly and offer good opportunities for private purchases there are also a number of pitfall which await the property auction purchaser. This article offers further information on what you need to look out for: Buying property at auction: What could possibly go wrong?

The post Buying Property At Auction: Tips For Virgin Auction Buyers first appeared on Property Insider.

There are three main ways to finance an auction purchase, each of which has different pros and cons:

Cash Purchase

The first option is to make a straightforward cash purchase. This has become more common over the last few years as, usually, small investors look for a better return than a savings account. It is quick and simple, and also allows an investor to acquire properties which cannot be financed easily or at all. Cash is king, as they say, and at a property auction it really is.

However, there are disadvantages to this even for investors who have the cash: It doesn’t allow the investor to fully exploit the power of leverage and there might be other financial and taxation disadvantages of buying a property outright too. Of course, if you do use this method you can always buy with cash and then mortgage the property later, at your leisure – perhaps waiting until a good mortgage deal comes along.

Remortgage and Refinancing

The second method is to borrow on, or refinance, existing properties from within your portfolio, or even your own home. This is a time-honoured approach which investors have used to lever their resources and build substantial portfolios for decades. It gives you the same financial clout in the auction room as when buying with cash.

Of course, this calls for some long term thinking and some ongoing expense. It can be restrictive if that ‘unmissable bargain’ turns up unexpectedly at auction. It may be problematic if, for example, a pre-arranged facility falls through, has its terms varied, or is withdrawn by the lender.

Auction Finance

Last but not necessarily least, the other main alternative is to seek to arrange finance on the actual property which is being purchased at auction itself. Although conventional wisdom suggests this is something you should avoid doing – if you want to avoid sleepless nights as a 20-working day completion date looms ever closer – it seems to be something which more and more auction buyers are doing at the moment. It allows investors to take full advantage of opportunities that arise at short notice, only pay for a loan facility when it is actually needed, as well as tie-up financing costs to each individual project more accurately.

How practical is this approach?

At one time few investors would have considered it that practical, and certainly not without at least a decision in principle from a lender before the auction sale. However, there are now a number of companies who specialise in providing funds for auction purchases in the short period between fall of the hammer and completion, even without a prior in-principle offer, and a number of innovative and flexible financial products aimed directly at servicing this market.

With this approach there are several different choices open to the investor:

• The first is the more traditional term finance, such as a buy to let mortgage. The second is some kind of specialised or bridging finance, perhaps where the property is not being bought to let or is currently not eligible for a buy to let product.

• Bridging loans have a reputation of being very expensive to service. However, in today’s low interest rate climate this isn’t necessarily the case – a good broker may be able to find you a bridging facility that costs only marginally more than a standard buy to let loan.

• Additionally, a third kind of finance option has opened up in recent years. That is, to access to peer to peer lending. There are now several peer to peer lenders who can provide short and medium term finance for property projects. If you do this with a property auction purchase, however, it’s a good idea to have a line of credit opened up before you bid. Also note that this can still be quite an expensive way of raising property finance.

The investor might consider one or perhaps a combination of all three depending on the property being purchased and their plans for it, whilst bearing in mind that they are both quite different methods of financing a purchase. The lenders’ terms, valuations, whether the loan is based on the current or future value of the property, or the borrower’s status and what you intend to do with the property, as well as the costs, will be quite different in either case.

However you decide to finance your property purchase remember this: You’ll have to come up with a deposit (typically 10%) when the hammer falls and the full balance at completion, which is typically only 20 days following the sale itself. So, make sure you have some definite plans for providing the finance before you actually bid at the auction. And, as ever, don’t be afraid to take professional financial and legal advice on the very best, most cost effective way to make your auction property purchase.

The post How To Finance Auction Property Purchases first appeared on Property Insider.