You’ve weighed up the pros and cons; you’ve decided to sell your land, (with or without planning permission) and now, the big question: what is your financial gain likely to be compared with the costs?

 

You will no doubt be seeking the maximum return from selling your land, and that is highly dependent on which path you choose to secure its value.

 

Should you wish to sell in the short term without planning consent, you are unlikely to make a large gain. Any purchaser will be assessing the land’s current value (agricultural, brown field – see Legalities) and the risk associated with purchasing land without development potential. Not all purchasers are potential developers willing to take the risks of buying speculatively.

 

You will undoubtedly gain the best value from either obtaining planning consent yourself, or entering into a conditional contract with a developer. There are a number of ways to maximise the land price by covering any increase in sales values and enhanced planning consents that may benefit only the developer after your land has been sold. Make sure that you are advised from the outset of all the options available to you – it’s a definite minefield!

 

Ensure that the land contract itself is watertight – not all solicitors are familiar with the terms and mechanics that can be used to safeguard your position. Seek advice from  a solicitor who is conversant with land transactions. This is a specialised subject area and a competent solicitor acting for a developer may well run rings around an uninitiated legal advisor.

 

If you choose an estate agent to sell the land, check that he/she has specialised knowledge and experience.  Be sure that you are fully advised on the range of options that will secure the best value for you. Most agencies will usually make an initial consultation of your land free-of-charge, advertised as ‘NO VALUATION FEE’. Fees will range from 1 to 3% of the sale price. The developer may agree to pay your advisor’s fees, but these monies have to come from somewhere…

 

I am frequently asked the following questions:

 

Q: How much is my land worth?
A: The most important factor in deciding land value is whether the land has planning permission or not. In general terms, a plot of land for sale with planning permission, on average, would be worth around eight to ten times the value of land for sale without approved planning. If the land is residential, an approximate rule of thumb is that it accounts for one third of the gross development value. Other determinants of the land value are location, size and future development potential.

 

Q: Who might buy my land?

A: Land investors, property developers and self-builders, horse and pony owners, farmers, to name but a few.

 

Q: What costs could I have to pay?
A: Typical costs and deductions can soon add up to thousands of pounds and may include promotional costs, Stamp Duty, VAT, surveyors’ fees, planning authority submissions for planning applications, architects’ fees, agency commission (1-3%), soil/ground conditions, Section 106 costs, Third Party – for site lines Tree Preservation Orders, environmentals (badgers, bats, great-crested newts, slow-worms…), decontamination costs …

 

Q: And what will my reward be?
A: Prices achieved for land with planning for residential redevelopment within West & East Sussex and Hampshire have ranged between £1m to £2m per acre. So although the cost and obstacles are many, the rewards can be high.

If you would like more information, or are thinking of selling your land then contact the Land Team, or phone on 01903 692952