Deciding that you are going to sell off a plot of land that you own can be a difficult decision to reach. Perhaps the land has been in your family for many years, or maybe you even have your own property on the land.However, once you have made the decision to sell, you will want to obtain the best possible sale price.
Although it is not unheard of for a developer to offer a top price for a particularly desirable plot of land, this is usually not the case, and the process involves several stages and a long series of negotiations, sometimes taking place over a period of several years.
Here are some of the key things to consider when selling land to a developer:
From a developer’s perspective, buying land where the principle of development being allowed is uncertain will be reflected in the price they will pay for land. Most land owners do not choose to sell on a whim and will often have obtained advice and undertaken some preliminary investigations of their own as to what the potential for development on their land might be. However far down the line these enquiries have progressed, it is worth bearing in mind how the developer will view the Planning status. Gaining Planning Permission can be expensive, but will almost always mean that the landowner is able to secure a better price, also potentially increasing the interest in the site from competing parties, which again could impact on the sale price that is ultimately achieved.
It’s important to understand how developers think and how they work so you can make your site seem as attractive as possible to them. When buying land, developers are taking on a degree of risk and the more certainty that can be provided to them in the early stages, the less potential risk they have and the more they are likely to offer to pay for the land. As above, having Planning Permission already in place can play a significant role.
Being able to demonstrate Planning gain – such as any requirement for the materials to be used during construction, landscaping requirements, Section 106 contributions for affordable housing and highways improvements, can also help a developer to formulate a plan with some confidence, therefore being able to work back in terms of the potential profitability of a site.
Providing certainty on development costs – for example by evidencing the nature of the ground thus informing the impact on foundation designs – can also be helpful.
As part of the sale process, you will need to compile all of the legal documents, such as the Title documents, ready for handing over. These will need to be thoroughly checked by the developer’s solicitors for any issues regarding access, rights of way, etc. Similarly, if there are any existing constraints that you are aware of, such as easements, flood risk, existing sewers, pipes and cables, adoption status roads, etc, details of these should be passed on at the earliest opportunity. If you are going to retain any adjacent land, you may also want to consider in advance any access requirements you may have, being sure to stipulate these so they can be taken account of.
Lea Hough’s Land and Development team are highly experienced in working with clients, including private land owners and companies, to help advise them through every stage, and ultimately help them to realise the best price for their land.
If you have a site that you think might be suitable for development and want to discuss how we could help, please get in touch today.