Whether you’ve inherited some developable land or have simply grown tired of gardening, now’s a great time to weigh up your selling options.
But before you lose the pruning shears for good, let’s weed out any potential confusion by exploring the right selling option for you.
Typically, there are four main ways to sell your land: an unconditional sale, subject to planningsale, selling land with planning permission, and finally, promotional agreements.
Of course, the selling approach you take will depend on your circumstances, and that’s why it’s vital to explore every path – with guidance from a professional – before rushing into any decision.
Time invested in exploring your options will significantly influence potential offers received by developers looking for their next site.
With that said, let’s look at the best way to sell your land…
If you’re in a hurry to sell, this option might be best for you.
With an unconditional sale, you sell the land as it is, without planning permission and without any guarantee the plot can be developed in the future.
If a buyer makes you an offer, the risk they’re taking will be reflected in the price they’re willing to pay.
What’s more, the buyer will also factor in the amount of time and money they’ll need to invest when submitting an application for planning.
It all adds up and, depending on the size, location and demand of your plot, the risk factor can take an eye-watering hit on your pocket.
Our advice? If you’re not in a rush to sell, strongly consider other options.
Otherwise known as a ‘conditional contract’ or an ‘option agreement’, subject to planning is perhaps the most common selling approach of all – and for good reason, too.
With this type of contract, the buyer has the option to withdraw from the sale if the planning application is unsuccessful.
It means they’re prepared to offer a little more for your land knowing the financial risk is lower than that of an unconditional sale.
But before you agree to a conditional contract, it’s worth noting the amount of time it can take to complete.
Even if a buyer is interested in your land, this approach to selling can take months (and sometimes years) for planning permission to be granted and for funds to finally hit your account.
Make no mistake, it’s a slow burner! However, if you have the luxury of time and don’t need to make a quick quid, a ‘subject to planning’ sale could be the right path for you.
If you’re selling land with the benefit of planning permission, you’re in a strong financial position to demand a premium fee for your plot.
Also known as ‘shovel-ready’, this type of sale means the site has the green light with all necessary consent and technical reports in place. You might even say it’s a buyer’s dream.
With the low risk and high convenience attached to this type of sale, buyers have the flexibility to continue with the planning process by applying their own level of detail, namely the number of units they intend to build, as well as the mix of housing.
As you may have already gathered, this really is a fast-track option for the buyer so make sure that’s reflected in your price. After all, your efforts to secure planning permission should be financially rewarded, right?
If you’re wondering how much planning permission can affect pricing, land with outline consent to build housing can be worth up to eight times more than land without approved planning.
So, if you’re not in a rush to sell, this approach is undoubtedly the path with the most potential profit.
Other factors impacting land value, include:
Typically offered with much larger sites, promotional agreements involve the developer using their funding, experience, and expertise to promote land through the planning process in an effort to secure planning permission.
Provided permission is secured, the landowner will then commit to selling their land with the promoter taking an agreed share of the sale price.
A promoter’s share is determined by the size and location of the site as well as the amount of risk involved.
And with this approach, you won’t have to worry about being out of pocket, either – all the risk is with the developer (promoter).
From the outset, they’d be expected to fund the entire process, including any legal costs from entering the process in the first place.
It’s definitely a selling approach worth giving some thought.
This is an obvious point, but make sure you can prove ownership of your land through legal documentation.
All property ownership records are registered with HM Land Registry who keep property sales and rights for both England and Wales.
Costs can vary between £30,000 to £300,000 depending on the size of the site. In some instances, fees can reach as high as seven figures!
When you’ve found a buyer, you need to get legal representation from an independent solicitor who has experience in the complexities of land sales.
Amongst other things, they’ll need to draw up a ‘contract for sale’ to make sure both parties fully understand the agreement with absolute transparency from the get-go.
There will also be financial implications, so make sure you have an accountant on board who can take care of tax liabilities and other number-related matters.
If you have a site that may be suitable for a new housing development, you might be sitting on a goldmine.
And with UK land in high demand, there’s never been a better time to consider the best way to sell your land for maximum returns.
For more advice on how to sell your land, get in touch with a Blackthorn Homes today.
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