Landowners who decide to sell their surplus land for development could be in for a pleasant surprise. The long-term undersupply of residential housing in the UK has created a strong demand for new homes to be built, and housebuilders are actively looking for sites to acquire and develop. If you have land to sell, it could be worth a tidy sum.
However, before you part with your asset, there are certain things you should check first. Here, we’ve put together a useful checklist and list of questions for landowners that will guide you towards a successful land sale.
Is my land suitable for development?
Whether you are looking to sell a former agricultural field or a disused industrial site, establishing whether the site has development potential is key to unlocking its monetary value. It’s worth seeking advice from industry experts such as Land and Brand New Homes. We can provide you with a clear idea as to whether your land is likely to be of interest to developers and the kind of return you could expect to achieve. In cases where suitability of development is unclear, it may also be worth commissioning a detailed planning appraisal.
What is the first step to selling my land?
Just as you would instruct an estate agent to sell your home, we would recommend that you instruct an experienced land agent, such as ourselves, to help you sell your land. With a trusted land agent by your side, they’ll be able to advise on and develop the right marketing strategy for your land and liaise with all stakeholders to produce the best outcome for you. In this marketplace, buyers often agree to pay a premium for exclusivity, which means working with a carefully chosen party can put you in a much stronger negotiating position.
How do I maximise the value of my land?
While a surveyor will be able to provide you with a formal valuation of your land, the actual price you can achieve depends on how much a developer is willing to pay. In general terms, the value is derived from the money a buyer can get from it. The value of a field with planning permission for residential development, for instance, will be based on financial return that can be achieved from the eventual sale of the individual houses built on it. At Land and Brand New Homes, we work with you to identify the land use and development that will produce the highest value.
How do I obtain planning permission?
It is possible to sell your land without planning consent (Unconditional Sale). This is a quick and straightforward way to dispose of the asset but may not maximise its value. A Conditional Sale, by comparison, is based on the buyer obtaining planning consent on the land at their cost and risk, before the sale can go through. Open Agreements operate in a similar way and are the most common form of land transaction. The sale price is likely to be higher than in an unconditional sale but can take years to complete. A Promotion Agreement is based on the landowner and developer working together to maximise the value of the land, with the promoter obtaining planning consent in return for a pre-agreed percentage of the sales proceeds.
Check the title before offering the land for sale
Check to see if the property is registered with the Land Registry and that you are the registered owner before you come to sell. Also check if there are any entries on the land title, such as a mortgage, lease or other restriction. You will need the mortgagee’s permission if you are planning to sell some or all of the land. You will also need permission for a third party for any restrictive covenants that are limiting development.
Give notice to ensure vacant possession
If the land is tenanted, you need to make sure you allow enough time to terminate the tenancy in accordance with its terms. Be aware that AHA (Agricultural Holdings Act) Tenancies and Farm Business Tenancies (FBT) will require a minimum notice period of 12 months if the land is going to be used for non-agricultural purposes. AHA tenants may be entitled to compensation for disturbance of their lifelong tenancy and any improvements they may have made. AST (Assured Shorthold Tenancies) residential tenants typically need no more than 2 months’ notice to quit.
Plan the practical impacts of the transaction
Selling a working asset may have practical implications that you need to think about. If there is livestock on the land to be sold, where will you house the animals? If crop is being grown, it makes sense to time the sale just after the final harvest. If you are selling part of your land, where will the boundary run? Will building and planning permission be needed to make changes? What about access, drainage and services to the land you are retaining ownership of? It’s important to retain your rights over the land in case you wish to develop more in the future.
At Land and Brand New Homes, we’ve been advising landowners wishing to sell and developers looking to buy for over 20 years. As premier residential development land agents in Sussex and Surrey, we use our considerable property expertise to help unlock the residential development potential of surplus land, providing specialist advice, brokerage and consultancy services to our clients. If you are a landowner looking to sell your land, why not get in touch with our friendly, knowledgeable team to see how we can help you get the best deal.