Journal · Development, explained

The risks hiding in the ground

The costliest surprises on a development are the ones you can't see — under the ground. Here's what a proper technical appraisal looks for before we commit.

Ask any developer where projects go wrong, and a good number will point at the ground. The most expensive surprises are the ones you can't see from the street — and even the biggest housebuilders get caught out by something that only shows up once the digging starts. The defence is a proper technical appraisal before you commit: understanding a site's risks so nothing lands as a nasty surprise later.

What a technical appraisal covers

When we look at a site we build a picture of its history and its guts: past uses and ground levels, the geotechnical and contamination findings, drainage and hydrogeology, archaeology, unexploded ordnance, ecology and protected trees, asbestos and demolition, highways, party walls and neighbourly matters, and the utilities on and around the site. On a site that already has planning, a lot of this exists in the submitted reports — each usually opens with an executive summary flagging the main issues, so you can get to the heart of it quickly. On a site without consent, you do the detective work yourself: historic maps, utility records, and any past applications on the council's website.

Contamination: the big one

The item that moves budgets most is contamination. What was the site before? A petrol station or a factory, and you can expect hydrocarbons or metals in the ground. Turn-of-the-century housing that was later demolished, and there's a real chance asbestos was simply buried on site — before the rules tightened, that is exactly what happened, and I've found it on more than one project. Contaminated material is classed as inert, non-hazardous or hazardous, and the cost of carting it away and disposing of it climbs steeply across those three. Forming a view on how clean or dirty a site is — and what remediation it will need — before you fix your price is essential.

The other traps

Beyond contamination sit the quieter ones: rights of light, party walls with neighbours, and off-site utility reinforcement — one of the costliest items of all if the local network can't take your load. Flood risk. And, crucially, how you will actually build the thing: access, cranes, and logistics. A cramped site you can't sequence efficiently costs more and completes slower, which hits both your budget and the point at which money starts coming back.

Not gloom — discipline

None of this is about being pessimistic. It's about pricing risk honestly, up front, so a site is bought on the numbers with the surprises understood. The developers who come unstuck are usually the ones who fell in love with a site and skipped the homework. On a small site the list is shorter, but the principle is identical — and it's exactly the discipline we bring, whether we're buying for ourselves or telling a landowner honestly what their site really involves.

If you own a site and want a straight view of what sits above and below the surface, that's the appraisal we do first, every time.

Elizabeth Homes

About the author

Phil Baily is the founder of Elizabeth Homes. He has spent more than two decades in residential development across London and the South East — from small sites to large-scale regeneration — with a focus on acquiring the right sites, securing planning, and keeping schemes viable and deliverable from first appraisal to finished home. Elizabeth Homes builds bespoke homes and works alongside landowners and investors across Hertfordshire, North & West London, Buckinghamshire and Essex.

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Commentary reflects the author's views and general market conditions at the time of writing. It is not financial, planning or investment advice.