When looking to sell a plot of land, there are often a lot of factors to weigh up. From the speed at which the sale will progress to the potential price a site may sell for, it is often a case of balancing up the risks and reward.
There are three main ways you can approach selling a piece of land. Here we take a look at these options and what is involved.
Sell the land as it is
The quickest and simplest route to selling land is to do so with the land as it stands – without any permissions for development in place. The downside is that this option is likely to generate the least value in terms of sale price. Any developer that makes an offer for land that has no planning permission will be taking a significant level of risk, and the price they are willing to pay is likely to reflect this.
Sell the land on a ‘subject to planning’ basis
Under this route, a contract is put in place, with a sale agreed if and when planning permission is secured. It is common for house builders to offer to buy land in this way as their level of risk is reduced; if planning permission is not granted or if the number of houses agreed makes the deal unviable, they know they can walk away from the deal.
Within this option, there are a number of possible agreement types – namely a conditional sale, a promotion agreement, or an option agreement. The type of agreement that is chosen will depend on how involved the land owner wants to get and how much control they want to retain during the process.
Due to the time it takes time to prepare a planning application and obtain permission, selling a site on a subject to planning basis can take months or even years.
Sell the land with planning permission
Some landowners decide to obtain planning permission prior to marketing land for sale. Land with outline planning permission is usually the most attractive to developers as they have the assurance that the land can be built on, but still have the flexibility to decide the finer details on their own terms.
Whilst offering the greatest sale value, land owners need to consider the time and expense involved in applying for and securing planning permission.
The option that you choose will depend on your circumstances are and the main objectives for the sale. Lea Hough’s Land and Development team can discuss the various options with you in more detail and recommend a route forward.
For an initial chat, please contact us here.