A detailed explanation of strategic land promotion
Updated: Oct 26, 2022
Strategic land is a plot of land that can't be developed immediately but could be developed in the future. This is based on its location, proximity to developed areas, or if it's part of a key access route. These factors present an opportunity for the immediate or long-term development of the site.
You have the right to promote a strategic land as an individual, institution, business, investor, or group of farmers. But for optimal land valuation, you will need to count on the services of architects, planners, surveyors, lawyers, landscape designers, and accountants.
This is often why strategic land is often promoted in partnership with a developer.
What is strategic land promotion?
Strategic land promotion is all about unlocking potential value through gaining Planning Permission. It entails the identification of suitable development land, then taking it through the planning process starting with getting the land allocated for development. You then may decide to sell the land at that point, or you may decide to get Outline Planning or even Full Planning Permission before selling.
The aim is to change the use of the land from one of low value to one of high value before selling it.
Strategic land promoters like NFC Homes work with landowners to bring forward their land for development unlocking and maximising the value.
Strategic land promotion: the step-by-step process
1. If you believe you have land that can be brought forward contact a developer/ promoter such as NFC Homes. 2. The promoter will undertake a free no obligation review of your land to determine whether it can gain Planning Permission. 3. If land has a good chance of gaining planning, you will enter into a simple contract or promotion agreement. 4. Once the contract is signed the promoter would take the land through the planning process. 5. The planning process can vary, however this is the usual process:
a. Step 1 is getting the site allocated. This means getting the land use changed from its current use e.g. agricultural to residential. b. Step 2 is getting Outline Planning Permission. This usually determines the site entrance and the number of houses to be allowed, with all other matter Reserved for a Full Planning Application. c. Step 3 is getting Full Planning Permission. This determines all elements of any scheme.
There are many issues to be addressed and resolved during the planning process including highways, ground investigations, flood and drainage risks, gradients, and restricted access, ecology, social housing, energy strategies. A promoter is best placed to resolve this using their experience and finances.
6. The land is marketed and sold. This can be done after any of steps 1 to 3.
Terms of the contract
The terms of this agreement are usually that the promoter will pay all costs associated with getting Planning Permission.
Once the land has Planning Permission, is it marketed and sold.
The landowner usually gets 80% of the value and the promoter gets 20%.
This is after costs associated with gaining Planning have been subtracted from the sales price.
The benefit of working with a promoter/developer
There is a large amount work and cost involved in gaining planning permission and then finding the best buyer. These costs involved regularly surpass £100,000.
An experienced developer can offer the right approach to promote your land, gaining the most valuable planning permission and then getting the best possible price when sold.
At NFC Homes, we ensure maximum benefit and minimum stress for you by working closely with relevant stakeholders. We are committed to guiding you and communicating with you through the process.
Whether you sign an option or promotion agreement, we will listen to your needs and help you meet your goals.
Sell land to a developer at no risk
NFC Homes funds the promotion process so there are no costs to you. Further, we share the same goal, which is to maximise the value of the land achieving the highest sales value; thus, there is no conflict between our interests and yours. We treat you as our partner, working tirelessly to deliver the best outcome. A good thing about our promotion programme is that you can continue using the parcel for its current purpose until we find a buyer.
NFC Homes regularly buys the land once it has planning, because we are a house builder as well. This can speed up the sales process delivering the proceeds much quicker with more certainty. Every agreement is different, and we can tailor the process to your needs.
Contact NFC Homes
We pride ourselves on delivering value and creating a legacy, so you can rest assured that we work in your best interest.
If you want to discuss your options with NFC Homes land specialists, get in touch with NFC Homes’ strategic land promotion team on 020 7947 5501.