How to start a property development business

The reality of becoming a property developer may not be as glamorous as it appears on Instagram or your favourite Netflix show. However, with house prices steadily rising in the UK, flipping properties or building them from scratch can open up lucrative opportunities to eager-eyed entrepreneurs, even if they don’t know how to start a business yet.

This doesn’t mean the path to success won’t come without its challenges, though. From rising Stamp Duty taxes and material costs to unstable market conditions, 2025 brings its fair share of challenges to UK property developers, making the pursuit best suited to those with a versatile skillset, access to funding, and a decent appetite for risk. 

Interested in turning your dreams into a tangible, brick-and-mortar reality? We dig into the nuts and bolts of becoming a property developer – outlining what steps to take, what challenges you should be aware of, and how much you can expect to spend – to make your property investment as safe as houses.

What does a property developer do?

Property developers are entrepreneurs who buy land or property to sell it on for a profit. As the name implies, they are tasked with managing the development process from the initial idea through to completion.

Generally, there are two main types of property developers: those who renovate old properties and sell them on for a profit, also known as ‘flipping’, and those who buy plots of land and build properties from scratch before selling them on for profit, in a process known as land buying.

The experience of every property developer will be different, but key responsibilities of the role include identifying lucrative development opportunities, developing concepts, securing funding for the project, overseeing the development, and marketing the property to potential buyers. 

You don’t need any formal qualifications to be a property developer. But the role requires you to wear many hats — demanding a mixture of hard and soft skills, from budgeting and project management to negotiation and problem-solving, as well as a comprehensive understanding of the housing market.

Property development doesn’t come without risks, either, especially in today’s housing market. Yet, if you’ve got a passion for property, are willing to take risks, and you have the capital to back it up, there’s really no ceiling to your potential success. 

How to flip houses for profit in 2025

A lot of people see flipping property as an easy way to make big money. But in reality, not everyone has what it takes to find success in the industry.

The trend of house flipping has been on the decline for years, with only 16,600 houses being renovated and sold for profit in the UK in 2023, compared to 52,950 in 2007, according to the real estate agency Hamptons.

The main driver? Surging costs. The price of building materials spiked significantly after Russia’s 2022 invasion of Ukraine, escalating startup costs for property developers. This, combined with escalating interest rates, rising construction costs, and a shortage of skilled tradespeople, has led many developers with tighter purse strings to hit a brick wall. 

Green shoots appear to be emerging in 2025, however, with the average price of property coming to market rising by 1.4% month-to-month in January, and new buyer demand growing by 5% year-on-year, according to Rightmove. 

Still, as the housing market continues to evolve, it is property developers with strong negotiating skills, an extensive understanding of real estate law, and the ability to tap into digital markets who will have the best chance of nailing success. 

Six steps to becoming a property developer

Property development is a complicated process, yet it can yield lucrative rewards if you know what you’re doing. Interested in trying your hand at a new skill but don’t know where to start? We guide you through the process, brick by brick. 

Step 1: Write a business plan

Every successful property development venture starts with a strong business plan. Not only does it act as a crucial blueprint for your project, but it also lets you compile a persuasive argument for investors. 

Start by succinctly describing the project and highlighting its key objectives and potential returns. Then, include some information about your target market, evidence for demand, and existing projects, using existing data from government reports and industry publications. 

To convince investors your project is financially viable, you’ll also need to crunch the numbers and include key financial details like development costs, potential funding sources, and revenue projections.

Writing a property development business plan for the first time? Learn more about how to write a business plan to get the ball rolling and to find templates to work from. 

Step 2: Find your project

Now it’s time to identify your project. While landing on an opportunity can feel like finding a needle in a haystack, there are a number of methods you can take to ease the process.

As a starting point, we recommend browsing on commercial real estate websites like Rightmove and Zoopla, scouring auction sites to find undervalued properties, and keeping an eye on local authority websites for surplus council land or properties. 

Familiarising yourself with local regulations like zoning laws, building codes, and planning permissions is non-negotiable too, as failing to do so could lead to you hitting a red light from the council later down the road. 

You’ll then need to cross-reference this information against building surveys and environmental and topographical assessments in order to ensure the properties are adhering to UK building regulations, and that the land is fit for development. 

Step 3: Get funding

Property development is a capital-investment endeavour, so without a solid financial foundation, even the best plan could fail. 

Fortunately, budding property developers have a variety of options at their disposal, including traditional bank loans, private equity, alternative funding like bridging loans, or joint venture financing. 

It’s important to point out that no funding method is completely risk-free. For instance, fluctuating interest rates can increase borrowing rates if you opt for private loans, while equity investing will force you to forego a chunk of your profits, as well as your decision-making power.

All in all, there really is no one-size-fits-all funding solution for developers; the right method for you will ultimately depend on your track record, project type and size, and current financial standing.

Step 4: Build a reliable team

Chances are, you aren’t a specialist in every domain. So, surrounding yourself with reliable professionals is an essential step in bringing your idea to fruition. 

From working closely with lawyers to help you navigate complex zoning laws to hiring accountants to crunch the numbers, every member of your team should be able to drive your project forward by contributing a unique but much-needed skill. 

Effective communication really is the linchpin here. You’ll need to keep all members in the loop by clearly defining roles, scheduling regular meetings, using shared software, and documenting important decisions to avoid misunderstandings. 

Step 5: Be a project manager

Project management is one of the main hats you’ll have to wear as a property developer. 

During the build or renovation, important tasks involve making sure budgets are being adhered to, managing contractor relationships, effectively communicating with team members and stakeholders, and ensuring that the project sticks to schedule.

Basically, since you’re the central point of communication, it’s your job to orchestrate the chaos. So, staying on top of your game is essential to avoid project roadblocks and costly delays. 

Also, bear in mind that the average property stays on the market for 44 days before being sold, so you’ll also be responsible for maintaining the house or flat until it finally passes into new hands.

Step 6: Market your property

You could renovate the most beautiful property, but if no one knows it exists, it’s not going to generate any profit.

Effective marketing introduces your real estate project to its ideal target audience, increasing enquiries, viewings, and potential deals as a result. Getting your project out there can also boost your reputation in the market, which will be especially valuable if you’re getting your name out there for the first time. 

When it comes to forming a marketing plan, having an online strategy is non-negotiable, as online listings make it considerably more likely for potential buyers to find your property. 

This doesn’t mean that traditional, local marketing methods should be overlooked completely, though. Print marketing can be used to create flyers and clear signage, helping you attract interest from your local community and capitalise on foot traffic. 

The most successful marketing campaign will mean nothing if your property is overpriced, however. So, to avoid your property sitting on the market for an ungodly amount of time, we recommend carrying out market research to price your property competitively. 

How much does it cost to flip houses?

As a general benchmark, it costs around £40,000 to £75,000 to flip a property in the UK. However, the total sum will largely be determined by the type and size of the property, the type of work you choose to carry out, and where the renovation takes place.

For instance, flipping a property in London will cost significantly more than in the North of England, due to higher initial purchase prices in the South of England and loftier stamp duty taxes.

The total costs of flipping a property can be broken down into the following categories: purchase price, cost of renovation and repair, holding costs, and selling costs. The process of developing existing properties can incur less obvious costs too, including costly unforeseen building repairs, insurance costs, and estate agent fees. 

To avoid overpaying, we recommend following the 70% rule and paying no more than 70% on a property’s after-repair value (ARV), minus the repairs to renovate the home. This guideline provides a buffer for unexpected expenses, and offers a quick and simple way to assess the profitability for a deal. 

Other ways to keep costs down include securing a good purchase price, finessing your negotiation skills with contractors and real estate agents, using cost-effective materials, and even carrying out some of the work yourself, if you feel confident enough.

Flipping ‘eck!

It takes more than a hard hat and passion in real estate to make it as a property developer. 

You’ll need sharp business acumen, a keen understanding of the market, as well as heaps of start-up funding. Setting realistic goals is key in your early stages, too, in order to avoid your real estate project being based on a house of cards. 

Rewards can be huge for those willing to put in the graft, though, especially with the UK housing market showing green shoots of recovery. Simply use the steps outlined in this article as a blueprint, concretise your plan, and start building your dream into reality.