Up and Down week

GoingThere

• Monday - Good meeting with favoured contractor all very positive - they want to start in 3 weeks eeekkk!!
• Tuesday - Managed to negotiate the use of a tatty old garage facing my site for a period of 12 months.  THIS IS GREAT NEWS!!!!! Will be good for heavy stuff like washing machine, fridge freezer and other bulky/heavy objects.  My payment, is to make it secure; new door, window, renovate front doors and fix a few leaks. Pick up window (door on its side) from www.bwrp.org.uk  but need a fair bit of adaption and re-glazing.  I have a substantial door due to be thrown out that can be used for the side door.  Manage to bring a heavy Henderson door hinge, (that has rusted solid),  back to life by soaking in penetrating oil for 2 days and then roasting in the oven at 220º for 30mins and dipping in saucepan of cold water!!  Plenty more work to do but most of it can be solved with a can of expanding foam.

Going Back

• Wednesday - Email from the Contractor asking for substantial evidence that I have sufficient funds for the project, ummmm well......Easter on excel.
• Thursday - Letter from HM Revenue & Customs.... We have now selected your business for a Business Records Check.... Talk about great timing!  I am part way through packing, renovating garage, preparing financial plans, finalising details, handover schedules and moving a (still full) workshop and flat in 3 weeks!!!  On the bright side I would have left year-end accounts until August when my accountant normally wants them and all info. may have been scattered in various boxes around the country.  I should pat HMRC on the back - it's all in the timing.

Up the pole & down the hole

Thunderbird 2 + The Mole

BT moved the pole next to the site from which cables flew across the site to a number of houses.
Not cheap but had to be done!

Virgin Media Cabinet next, even more ££££

Nice view up here

Wapping Wharf Bristol - Construction starts!

Yipppeeee - work has started on the other big development in my neighbourhood; http://www.wappingwharf.co.uk/progress-update.html


Is that a snow machine in the foreground?

FINANCES :(

Introduced myself to a new world of Building Finance this week.

So switch off now if £ and % and PA are of no interest to you.

The Plan

Having sketched out how everything was to be funded sometime ago, thought it would be a good idea to take things a stage further and firm up some proposals in case a contractor asks how on earth I am going to pay for all this.

The plan was to build half of the development, borrow the remaining half for say 6 months, then pay off the loan when the house for sale is finished and with the small surplus continue the fit-out of No. 70 UPH (kitchen, shower, stairs and decoration).  

Based on an initial enquiry a short term loan would cost around 0.85% per month - Fine.

(I do own a 1/3 share of a house worth £200,000 and falling, but the question has been asked - what happens if we cannot sell the house in time)

David the architect forwarded some recommendations from a Client but all of these were for a minimum of £1M and £500,000 so a bit too big, but not by much.

Development Loan 1

So I made an appointment to see the Mortagage Man at Lloyds in Bedminster, Bristol who could not help, but had a number on his mobile of someone who could.  I was handed the mobile and could only just understand what he was explaining to me and then he completely lost me when we switched from a loan to a buy to let mortgage.  I later forwarded him some figures and he explained what he could do and the fact the money was ready and waiting for me, though may be gone when I need it later in the year.

First Lesson: there are Regulated Loans where borrowers intend to occupy their development (ie. me) or Un-regulated Loans which are for speculative development.  

So as it was later explained to me I must go for the latter, and then perhaps have an 'epiphany' and decide to live in the house after all.

This did not sound good because the new 70UPH is quite obviously not a commercial development and could be seen as an eco-folly and definitely a very bespoke scheme designed specifically for me. Even worse was the cost of the loan, for £300,000 over 3 months would cost a little over £31,000 in interest, set-up cost, legal fees, valuations etc.

Development Loan 2

I followed this one up with an ex-colleague of one of the £1M lenders that were out of my league.  This guy was a finance broker who tapped into high street funds and was much more approachable and kindly took the time to explain the rules. Basically the money would not be a problem but the lender would require such extreme oversight from day one of construction and would dictate so much that I might find it impractical.  On the bright side the loan would be drawn down as required and interest paid per day so roughly speaking the loan would range from zero to £300,000 an average of £150,000 but the set-up cost was still 2% or £6,000.  

Second Lesson: whatever the question is, there will be a 2% set-up cost for anything + valuation cost + legal costs and legal charges, so the interest payable may not be the most significant component. 

Short Term Bridging Finance

Having mulled over the options it seemed more sensible to raid more tax free savings and pension if possible to reduce the period of the loan and amount required.  I also thought I could use my mothers old house as security for a loan if my brother and sister would agree to transfer to my name - this was the easy bit.

I naively thought that the security of a vacant house worth £200,000 could easily raise £120-150,000 and slash the borrowing costs - almost the reverse.  If the house had even a small mortgage on it, it would have been considered 'in play' and therefore an additional loan could be taken out in the shadow or slipstream of the principle loan.  Without an existing mortgage the cost of organising the loan would be the same as a much larger one; maximum loan on a £200,000 value house would be 60% = £120,000 and the total cost for over 3 months would be equivalent to 24-30% interest PA!

The benefit would be no questions asked and the lender would not be crawling all over the project from day 1 or require various construction guarantees etc. they would however hammer me for interest at a time in the project when my resources were close to nil.

Conclusion

When I hear of people using credit cards etc. to finance construction it sounds mad but I am now realising it sounds fairly plausible!!

In summary I am now maxing out on every available source at my disposal, including friends and family,  if things get tight right at the end of the project, then the contractor my have access to finance at a competitive rate and in the worst case I dive off the Short Term Bridge into the Finance pool and hope I am not in there long enough to freeze my assets!!

That's my last word on finance it's not clever, it's not funny, it's not even very interesting but the contractor will need paying, if he is reading this everything's fine.

Visit to Ecobuild at the massive Excel Exibition Centre in east London
Spent a very busy 6 hours dashing between stands, laptop in hand to iron out a few details and check specifications used in the Tender.

Rationel (timber, clad externally with aluminium) have updated their handles with a standard design rather than different for each window type which is good, though the design does not look especially robust with some plastic bits.  Also find out the the windows cannot be supported by the cavity closers and will need to be brought closer to the face of brickwork for support because some units are very heavy.

NBT (insulated render) have some mock-ups that allow me to kick some render to give me some reassurance that it is robust.  In a 2-way discussion with Rationel we work out that the render needs to be applied to the openings in advance of the windows to maintain a ventilation gap around the perimeter of the windows and avoid damage to the windows when the render is applied.

Baumit (Render)  The render specialist at NBT, a very knowlegeable guy takes me to the Baumit stand to show me some devices to allow mechanical fixings through the render for the planned Brise Soleil, solving a problem that has troubled me.  A core of insulation will be drilled-out replaced by a 'plug' and rendered over; so long as we remember where the fixing plugs are!  The Baumit rep. also gives me a colour swatch to select a colour for render and obtain a sample requested by the planners.

Karcher (handles) Happen to pass a stand with my selected stainless steel handles on display - so I have a go.  Not much to say they look just like the catalogue.

Rainwater Harvesting My specification seems OK but seems like the control panel needs to be a certain distance directly beneath the header tank which is useful to know and that it requires the mains supply at this point as back-up.  The header tank has precious little headroom for maintenance due to the flat roof construction but lowering it means that there will be insufficient head of water to feed the 2nd floor WC.  Will have to leave this one until we are on site, practicality will prevail although will be a real shame to have to use mains water for WC - maybe a big diameter fill pipe and a weak valve can be made to work to refill the cistern in minutes rather than hours.  Also complain about the high cost of the vertical format RainwaterHOG tanks we are using for stormwater attenuation.  5 are needed and space is at a premium in the small yard and garden, but choice seems to be restricted to about 2 manufactures.  These are a trendy Australian design for the retro-fit market, maybe an alternative can be found before we need to install them.  Also find that the underground tank must be located a minimum distance below ground level - this is problematic because the foundations of the existing and new building are so very close. We must keep clear of the '45º zone of influence' or push the foundations deeper that will add to the costs.

Viessman (Boiler and solar heating)  Learn that the zoned control system that I had understood  the boiler came with does not quite match earlier information from their technical department.  Good to know this now, although very difficult to come up with a simple and efficient control system where I do not know for sure how the various spaces are going to be used.  The size of hot water cylinder is questioned and is potentially too small (150 litres each for boiler and solar = 300 L) to supply 2 showers and a bathroom. 

If the sun is not shining we only have 150L, so this a worst case situation - overcast + winter a bit like today!  The next size tank is 500L so this is not an option, does not fit, and seems potentially wasteful and not really dealing with the problem.

I know nothing about showers so have done some research and calculations; survey by Unilever suggests that average length of shower is 8 minutes and my friends teenage son drains a 160L tank in about 25minutes!!!!!  Key thing seems to be the shower head: Traditional shower head ranges from 12-16 L/min.  Some stopwatch and measuring jug work; with friends shower is a surprisingly low 8L/min and my own a pathetic dribble of 3L/min.  After some research  I find a pulsing shower a Nordic Eco Galant in a Which? 

report.  http://www.which.co.uk/energy/creating-an-energy-saving-home/reviews-ns/water-saving-products/water-saving-shower-heads/ 

It uses down to 6L/min and has a pulsing mechanism so the water is more like a dashed line, on the same principle as a flashing bike light - so seems to make sense.

If I use these shower heads and assume that showers of around 10mins are slightly staggered then the cylinder can cope if the boiler is working flat out. Teenagers and dreamers can only use the shower when the sun is shining, although if they get up late and miss the morning rush and book evening appointments there will be no problem.