The game in property finance development
Life is not a game; yet the metaphor has value – rules exist, and one should have fun playing.
Within the game, it has been said that there are three ways to make money: inherit it, marry into it; or invest in property.
Property’s enduring appeal
Property values in the UK are doubling every 5-8 years.
That is why property investments are such a draw to so many players. There are nearly 2,500 builders and property developers in the UK. The field to play on is wide, long and high. Location; type; new build; renovation; finance; refinance; purchase/disposal, build-to-let, (and in modern times) rent-to-re-rent. It is a palette of creativity, for those who understand how to sketch, design and apply their property imagination with funding.
The utility of games
Not everything can be taken at face value. There are not many proxies for actual experience, but some activities do serve a purpose. Prior to the 1950s, board games traditionally were a key medium to transmit skills and information. The internet and ChatGPT have put paid to that. Yet, games appeal to human’s innate competitive spirit.
Games imply a large measure of chance; and despite this aspect, “Monopoly” has better odds than playing a roulette wheel. ‘Player agency’ aside, it is knowing what to decide and when.
It is interesting to consider that “Monopoly’s” inventor was Elizabeth Magie, a woman with strong Progressive political views. In 1903, she designed the game as a morality play to warn against the horrors of crushing capitalism, describing it as “the game of Life”. Commercial zeal and time have transformed it: selling in 114 countries and 37 languages; with 275 million boards sold; $30 billion Monopoly money is printed each. It is a cultural icon. From raw land to a yield bearing asset!
The original Monopoly (“The Landlord’s Game”) board lay-out
The object of “Monopoly” is to become the wealthiest player by buying, selling, trading and collecting rent on properties – ownership and cash flow. Finance is all.
Dynamics mimicked
Those involved in property development understand these dynamics. While the requirements of successful property development in the UK are not complicated, they are complex. One should take a proactive and positive approach: leveraging experience and expertise as one goes. Knowing what to decide and when – but to be engaged. Sufficient financing one can rely upon is, literally, vital.
Yet many potential property development projects never get beyond the concept phase and a significant number never receive the (re)financing they so desperately needed to continue to completion. Insolvencies of UK Builders and Property Developers now stand at close to 10%, representing a doubling of the rate since 2020. Many missed opportunities and unnecessary failures for those; perhaps opportunities for others.
Walking the Talk
That is where Ashlar Property Finance plays its role. We believe that the property finance process can best be served by offering experience and expertise. The Ashlar team is composed of seasoned property developers as well as financiers – solid and reliable, a foundation for any project. Ashlar understands what it takes to develop a property and how to (re)finance it appropriately. We know the rules (how, when and why they apply) as well as appreciate the challenges that the ‘role of the dice’ in construction can bring; we listen well and find practical solutions; we ‘walk the talk’; we are decisive.
Property development is not a board game, nor dictated by chance; but understanding the rules, then playing them well and being appropriately financed, counts for a lot.
Give us a call, the first step to “Go”!
Justin Jenk has been investing in property and other assets for over 40 years. He enjoys finding and connecting dots. This is a ChatGPT-free article.
