Selling land is not an everyday occurrence for the majority of people. As such, there are many commonly misunderstood elements involved in the process. Here we look at some of the myths we encounter from prospective sellers – giving information about the true nature of land transactions.
You can only sell land with planning permission
Whilst land with planning permission is often an attractive proposition for potential buyers, this doesn’t mean that there won’t be any interest in land that doesn’t have planning permission.
Land can be sold in a number of ways, the simplest and quickest of which may be as a piece of land with no planning in place.
There are also routes to sell land which offer a middle ground – such as a conditional sale, a promotion agreement, or an option agreement. These allow land to be sold on a ‘subject to planning’ basis, limiting the risk and outlay the landowner will need to bare.
The size of the plot determines the price
Valuing land isn’t a straightforward process as each piece of land will have its own unique features; varying greatly in location, size and characteristics. With so many variables to consider, especially with more complex sites, placing an exact value on land is notoriously difficult.
The size of the plot and location of the land will be looked at when land is valued, but these are only two of the many factors that will provide the guide price. The land’s previous usage and whether it has any planning permission in place are two key factors when looking to sell land for development purposes.
Valuing land is not a straightforward science and it will ultimately come down to how much an interested party is willing to pay for it.
All land is the same
All land is not necessarily the same. The location and quality of the land are extremely important factors when it comes to determining the desirability of land and whether it would even be suitable for development into housing.
The land’s previous usage is also likely to be an important factor and whether it is greenfield or brownfield will also influence whether it will be of interest to a housing developer.
Land transactions are simple and quick
It could be easy to think that land without existing dwellings on it might be straightforward to sell. With nothing to fall apart, break, get damaged, burnt down, or otherwise, you may consider that there is little to investigate or negotiate. However, there are many other factors at play when land is being acquired for development and a developer will want to fully understand the position in relation to these before they proceed. For example, they will want to know if there is any road access to the land, whether there is access to all the basic utilities, if there are any topographic concerns (such as flood risks, whether it’s on a steep slope, access to water and sewage systems, ecology issues, drainage, ground conditions, etc). All of these investigations take time and the findings may lead to further negotiation on price.
The structure of the deal to sell the land will also play a key role in how quickly the deal may take to complete. Conditional sales, promotion agreements, and option agreements allow land to be sold on a ‘subject to planning’ basis, but mean that planning has to first be approved before a landowner will receive the final sale value.
Lea Hough are able to act on behalf of both landowners wishing to sell land – be it farmland, development land or a redundant brownfield site – and developers wishing to acquire land. For an initial discussion about selling a plot of land, please get in touch with us.
