Research the market
A good starting point is to make contacts with local estate agents and talk to them to acquire some of the knowledge you'll need. These are some of the factors you should consider to find out information about the area you're buying in:
Look at social demographics. Due to an increased divorce rate and an ageing population, the number of single people wanting homes is rising rapidly.
Consider the supply and demand factors. The UK planning system has failed to deliver the amount of homes that people seem to want. This is arguably the main, long-term factor behind price increases in housing in the UK. Low interest rates and low unemployment have exacerbated this trend.
Understand the local economy. Get figures from your local authority planning department for the number of new houses built as a percentage of existing stock. Growth in business sectors is a good indicator of an up-and-coming area.
Don't go too far afield. Stick to the areas you know and research them thoroughly.
Target your development. Ask yourself, does your idea really fit the market? Does it fit into the locality you have chosen? More importantly, does it fit the basic ways in which people aspire to live in that locality?
Look at what your customer wants. Young professionals and affluent older couples without children or dependants seem to like stylish, city centre apartments near the places they want to spend their money. Look at current fashions and consider the type of accommodation that will maintain its value because of its quality and location. Families need successful neighbourhoods, where there are good schools, good transport, safe environments and sufficient parking. They need more space, inside and out, and lower running costs, but they still want good design.