Is it worth gaining planning permission on my land before selling?
Landowners with promising sites that could be used for residential or commercial developments often consider selling to developers and other buyers who are willing to pay top dollar. However, too many landowners rush into sales without taking the time to consider how they can maximise their return and ensure they are getting a price that reflects the land's true value.
Some landowners are led to believe that by securing planning permission before selling their land, they can dramatically increase its value and attract interest from a wider range of high-quality buyers, but how true is this? Below is an overview of what you need to know when deciding whether to secure planning permission before selling your land.
Why sell land with planning permission?
Many landowners believe they have to secure planning permission for their land to increase the profit of the sale. Even if it seems certain, however, that any planning application for your land would be successful, there are plenty of cases where sites that seemed certain to be granted planning permission were rejected due to policy changes.
Selling land with planning permission already in place, to a certain extent, will reduce the level of risk for the buyer and increase the land's value. If you're eager to get paid for the land sooner rather than later and can't afford to wait for the planning permission process, you can sell your land on a "subject to planning" basis.
Are there any limitations to selling land with planning permission?
While it's true that acquiring planning permission for your land has the potential to increase its value, there are a number of potential drawbacks that should be considered first:
Although land with planning permission generally commands a higher price tag, landowners must consider the potential rise in the value of their land against the upfront costs of gaining planning permission. Earning planning permission comes with substantial costs that landowners will have to pay outright.
Securing planning permission is not only expensive, but it is also an incredibly long process. It can take several months to gain planning permission which means that landowners who are interested in a fast sales process will have to delay putting their land on the market for several months.
Landowners may also miss opportunities from interested buyers if they delay selling their land due to waiting for planning permission.
Gaining planning permission for land is rarely a straightforward process. If a landowner does not have a large amount of time to dedicate to their planning permission application, and the processes that follow the initial application, it may not be worth the time or money to secure the permission.
How do I know if my land is suitable for development?
In some cases, it's obvious whether a piece of land will make a good location for a new residential or commercial development. If your land is located on a hilltop near a national park, it's less likely to appeal to developers than a piece of land in the middle of a town or city.
But most cases aren't this clear-cut, and it can often be hard to tell whether a planning application will be successful until it has been filed. If you want to know how much land is worth, you need to consult with an expert who has experience with the planning permission process.
An in-depth planning appraisal should give you a better indication of how feasible developing the land will be.
How much more is my land worth with planning permission?
This depends on the specific piece of land in question.
A professional surveyor can give you an idea of what your land is worth, but the reality is that land is worth whatever developers are willing to pay for it. The value to a developer will likely be proportional to the amount of money they expect it to generate once they've developed it.
How they plan on developing the land will also play a part in determining what it's worth to them, not if the land has planning permission. For example, if they're planning a residential development, the land's value will depend on the return they expect from selling the houses once they're built. Therefore, providing a developer wants a piece of land, whether or not it has planning permission may not be so important.
How do I get planning permission on my land before selling it?
As we previously mentioned, obtaining planning permission costs time and money that not everyone has. If you can't afford to obtain permission on your own, you might want to consider selling your land without planning permission or offering the land to developers on a subject to planning basis.
If you have the resources to secure planning permission yourself and you feel confident in doing so, making your own application will eliminate any uncertainty about the land's suitability for development. However, be aware that you will lose any funds you have already spent if you are denied planning permission.
If you choose to apply for planning permission yourself, you should also be aware that you may be acquire planning consent for something that doesn't extract the best value for the land, or may similarly undermine its potential wider prospects.
Additionally, if your application for planning permission is refused or isn't trying to obtain the optimal outcome, the site could acquire a negative planning history.
Remember, all planning applications and associated correspondence are in the public domain, available online for potential buyers to see for themselves. You should seek professional guidance before applying for planning permission.
We highly recommend seeking the assistance of a reputable land developer to take it forward. Operating for almost 20 years, we at NFC Homes have delivered well over 1,500 new homes and commercial developments across the country.
If you're currently in possession of land that you'd like to sell or have appraised, contact us for a free, no-obligation quote from our team of experts today.