Are you a landowner keen to cash in on your land? If you have a site that may be suitable for a new housing development, now is an excellent time to realise the value of your asset. With the ongoing housing crisis and the UK government’s goal to deliver 300,000 new homes per annum for the next five years or so, there’s never been a better time to sell your land.
As a leading land estate agent in the South East, Land & Brand New Homes is an authority on all aspects of land disposal, acquisition and development. Working together with landowners and house builders, we provide expert advice and guidance to bring development sites to fruition.
For landowners, there are three main ways you can sell a plot of land.
Selling without planning permission
The quickest and arguably most straightforward way to realise the value of your land is to sell it ‘as is’. However, without planning permission secured, any buyer would be investing his money on the basis that permission could be obtained – a financial risk that will be reflected in a low-value offer.
Will planning permission be granted? For how many houses? What infrastructure improvements will the council insist on? How quickly would permission be given? There are many examples where a site looked certain to be granted planning permission only for a change in policy to put the whole project in jeopardy.
These risks are important considerations for developers, and your buyer will most likely make an offer for the land that is somewhere between the site’s actual value for its existing use and what it will be worth once planning permission for residential development has been obtained.
Selling on a ‘subject to planning’ basis
The second strategy to sell land for housing development gets around the above-mentioned challenges by agreeing to sell the site as a ‘conditional contract’ meaning the buyer won’t be committed to buying the site unless and until planning permission has been secured. Reducing the financial risk of the purchase in this way will increase the price the buyer is willing to pay for the land. It’s common for house builders to offer to buy land like this.
Selling ‘subject to planning’ can take time, simply because of the length of time needed to plan and submit the planning application and wait for the decision to come through. It also means that there may be little urgency from the developers when preparing their offers since they know they can probably find an alternative site in the event that this one takes too long.
What’s more, the buyer will have made some assumptions about the kind of planning permission they will get, which they will expect to see reflected in the land sale contract. If expectations are not met, they will be free to walk away from the deal.
Selling with planning permission
The planning risk for developers can be removed if the vendor gets planning permission before selling the land. We would recommend securing outline planning permission, which gives approval in principle to house building on the site but with detailed matters to be decided at a future date. Structured correctly, outline permission can help to maximise interest in the site when it is marketed for sale – providing the certainty that developers want but leaving enough flexibility for them to impose their own business models on the site.
What’s more, marketed as ‘shovel ready’ with the right technical reports in place, a premium price can be charged for the land since the building work can start very quickly. This is attractive for developers in a hurry, and who may only have a 12-month window in which to start their project.
How Land & Brand New Homes can help
At Land & Brand New Homes, our main focus is on land promotion, helping the vendor to secure planning permission and maximise the value of the site. As explained in an earlier blog post, “under a Promotion Agreement, the interests of the developer and the landowner are aligned” so that negotiations can progress on a genuine partnership basis. In short, everyone wins.
Land & Brand New Homes is co-owned by accomplished property entrepreneur Bob Hilder, who has over 30 years of experience in the property industry and an enviable track record in residential development. As a specialist strategic land business, we routinely work in collaboration with local, regional and national developers, landowners, councils and other stakeholders to bring forward land for housing.
At the end of the day, the route you take to sell your land will depend on your individual circumstances, your views on an acceptable trade-off between the speed of the sale and the price achieved, and the level of risk involved. We will be happy to assist with any queries you may have about selling your land in West Sussex, East Sussex, Surrey, Kent and across the South East, assuring you of our professional integrity at all times. For a confidential, free no-obligations chat, please don’t hesitate to get in touch.