The land is a valuable asset, which can bring appreciable results through all means, such as selling land to developers for development. However, you will first have to evaluate its right value and find the means to seal the deal appropriately. Queries about the price you can get or the possibilities of negotiations are not uncommon in a scenario like this. To bring a clearer picture, this blog will emphasise selling land to developer in the UK:
Are you selling land to developers for development?
Are you looking to plan transactions for development? Here is the set of factors you need to keep in mind:
Professionals
Planning to proceed with the deal for your land on your own can seem to be a profitable deal, but in reality, it is not. The assistance of all the needed professionals is necessary at different steps. Developers can also have firm criteria to proceed with the land they want to acquire. There can also be numerous aspects you must not have the know-how about.
Promotion Agreements
Arrangements of these kinds are sought-after among developers over the option agreements. They allow the promoter or developer to apply for permissions at their own expense. Upon receiving the planning permission, as a landowner, you have to sell and the promoter can get the fee from the proceeds. Over here, you will have to settle the ideal deal to safeguard your interest with these arrangements.
Titles
Even though sorting titles can appear to be an easy step, these issues can dissuade developers and even detain sales. There can be many matters, including missing documents, unregistered land, boundary problems, and rights of way.Even though you can eliminate them later, will it not be wise to identify and resolve them at the initial stages? Not just your ease, but this is another element that developers can look for.
Mortgagee’s Consent
If your land is likely of legal charge, you will have to seek the lender’s consent to proceed with the sale. If you plan to exchange the larger section of your land, you will need to get the release. It can even mean negotiating the financial arrangements again, which is addressed early. For this, you will have to get in touch with your solicitor and relationship manager.
Planning Consent
Planning Consent is undoubtedly necessary for you to proceed, but you also need to emphasise who will do that. You can give it a shot at your end, but it can turn out to be a risk. That is why you need to consult professionals to evaluate the success of an application. Several landowners choose to step into conditional or promotional contracts, as this can increase the chances of success through the right terms.
What amount can developers pay for land in the UK?
Before you can roll with selling land to developers, do you not want to know about the sum you can expect from them? Many factors can influence the buying decision of the developers, including the building potential, size, location, erection costs, and profit margin. However, you would still need a rough idea of the estimated figures. The median cost in South Yorkshire for lands with planning permission can allow developers to set back by 70,000 pounds. For Greater Manchester, costs can be 73,499.50 pounds, while there is a median cost of 75,000 in Bedfordshire.
Do developers buy land without planning?
Without any doubt, selling the land without planning permission can be swift and simple. However, in the absence of any secured planning permission, the buyer would invest money based on the permission you can get- a financial risk. This will present in a depreciated offer.
In many conditions, including the duration and possibilities of permission, the number of homes, the possible infrastructure improvements, the project can be at risk. For developers, they can be essential considerations, which can influence the buyer. One can extend an offer to the land, which can bring existing value or planning permission.
What is the cost of an acre of land that has planning permission in the UK?
The cost of an acre of land can go up to £ 3,00,000 in the north, and it can reach more than £ 1 million in the south. You can purchase farmland in the UK for around £ 12,000 to £ 15,000, but it can depend on the location. If it is around your home, an acre of land can cost up to £ 50,000.
If the land has the planning permission, it could boost it for more than 8 to 10 times its value. For residential land, it can cost up to 67% of the value of the land. If the value is £ 1 million, a land worth the acre can reach £ 6,70,000.
What is the most effective way to sell a piece of land?
When it is about selling the land, getting its best value is an aspect that both parties would look at. As discussed previously, land without planning permission may not always turn out to be favourable for a developer.
Land with planning permission
With planning permission, you can eliminate the possibilities of planning risk for them. You can obtain the outline planning permission, which can authorise the housing principle on site. It can also keep up the flexibility for implying its business model on the site. It can amplify the interest of the market when being put on sale.
For a packed up site with technical reports about drainage and ground conditions, you can take it to the stage where the developers would need to embark on the construction. The shovel-ready sites like these can allure a premium during their exchange as developers will not have many options/alternates.
If the developers need to commence on the site in the coming 12 months, they will not try to invest in one of many places without planning. Yet- they would have to buy a smaller pool of land, which has planning.
The role of land promoter
A land promoter can step in to get the planning permission for a landowner. One can charge the costs and extend their proficiency at risk even if they do not get fruitful results. So, as the landowner, you will not have to worry about the costs. Instead, the land promoter charges the site value once it is sold. Both the parties share the mutual interest to make the most of the value. Even when the promoter charges share, you, as the landowner, can get more benefit over what you can get from the sale to the developer in the previous processes.
Can you negotiate the land price with the developers?
The end goal of the blog is to assist you in sealing the most profitable deal. With this, when you want to initiate a negotiation, your land must have all the features that can serve the developer in the best interest. Your property should be shovel-ready, not surrounded with the possibilities of hazards, have the titles sorted, and planning consent too.
Final Thoughts
When the need of selling land to developers in the UK, staying updated with all the vital aspects is necessary. In this blog, we have covered many of them, including tips, the need for planning permission, negotiation, and the price per acre. If you want to proceed with the sale of land and need assistance for the same or have more queries, you can reach us here.
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