Quick guide to selling your land to a property developer in the UK
With property values continuing to rise in the UK, there has never been a better time to consider selling land. If you are looking to sell land to a developer, it can be quite a daunting prospect. However, this quick guide will outline the possible ways that you can sell land in the UK for property development and get the most value out of your land.
The housebuilding industry in the UK is in a precarious situation at the moment, with demand for housing ever-growing and more people choosing to live on their own than ever before. It is clear that the UK is in dire need of new housing - which leaves landowners with a valuable prospect on the horizon.
If you are looking to sell your land to a property developer, you could be in for a sizable profit as a result of the high market demand for usable land for properties. Land valuation for properties is much more profitable for landowners and developers, which can make for a very healthy relationship.
For many landowners, the world of property development is entirely removed from their knowledge of the housing market, which can make things confusing, to say the least. There are a few ways that land purchases can be completed. Firstly, we will take a look at purchases with or without planning permission.
Land purchases without planning permission
This is the most streamlined and simple approach to selling land. In this scenario, developers will purchase the land outright before any planning permission has been agreed upon. If you're looking to sell your land quickly and with a minimal amount of red tape, this is most likely the best option.
Selling land this way removes all of the risks from the seller since they won't have to spend a long time (and potentially a lot of money) acquiring planning permission for their land.
Land purchases on a conditional basis
For many land developers, the risk of investing in land without obtaining planning permission first can be too great, so they may purchase land on a conditional basis. What this means is that the purchase will only be completed once certain conditions are met.
Other stipulations may be the need for a site inspection to be carried out by the developers and assessing how easily electricity and water can be set up on the land. This can cause time delays in the sale of land, but it is a useful safeguard for both developer and landowner.
The option to purchase
Another approach to securing a conditional purchase on land for developers is the option to purchase. A group of neighbouring properties is frequently purchased to build a larger site, or it can be one landowner who wants the developer to start quickly with the planning process and desires a simpler, faster procedure.
In these scenarios, an option agreement is set up between landowners and developers where developers agree to pay a fixed sum for the site usually once they have obtained planning permission. From here, developers will attempt to obtain planning permission and get to work on checking the viability of the project.
These are flexible agreements that will require negotiation from both parties, but often this is the quickest way forward.
Promotion agreements
One final, less common approach to selling land is through promotion agreements. Here, a third-party promoter will aim to obtain planning permission. If they are successful, the development must be sold on the open market to ensure a competitive price.
For the promoter, if all goes well they receive a share from the sale of the land, as well as an opportunity to purchase a portion of land away from the open market.
The many ways to sell land in the UK
As this guide has shown, there are a few different approaches to selling land to a property developer in the UK. They each have their own benefits and shortfalls, so the right option will largely depend on the land itself.
The best approach is to find a trusted property developer who will be able to navigate you through this often confusing landscape. For more information about selling land in the UK, or if you're in possession of land that you'd like to sell, contact us today and our team of experts will be happy to assist you.