If you’ve come into possession of developable land through inheritance or simply are tired of gardening duties, now is an ideal time to consider your selling options. In this blog, we’ll explore the various approaches you can take and the best selling option suited to your needs.
What are the different options?
Typically, there are four methods for selling your land:
- Outright sale
- Sale subject to planning
- Sale with existing planning permission
- Promotional agreements
Naturally, the choice of sales option will depend on your specific situation. That’s why it’s vital to explore every path with the help from a land expert before committing to any decision.
Unconditional sale
If you’re in a rush to sell, this might be the most suitable choice for you. With an unconditional sale, you’re selling the land in its current state. This means without planning permission and offering no assurance of future development potential.
Should a buyer present an offer, the risk they assume will be reflected in the price they propose. Additionally, the buyer will also factor in the time and financial resources necessary to pursue planning approval when making their offer.
When everything is tallied, depending on factors like size, location, and market demand for your land, the risk element can significantly impact your financial outcome.
Our recommendation? If time isn’t of the essence, it might be wise to consider alternative avenues.
Subject to planning
Also referred to as a ‘conditional contract’ or an ‘option agreement’, the subject-to-planning method is the most common selling approach for good reason.
Under this arrangement, the buyer retains the option to retract from the transaction should the planning application fail. Ultimately, it means that they are willing to offer a slightly higher price for your land, recognising that the financial risk is lower compared to an unconditional sale.
However, before committing to a conditional contract, it’s essential to consider the timeframe involved. Even if a buyer expresses interest in your land, this sales approach can be time-consuming. It can often take months, and sometimes even years, for planning permission to be secured and for funds to be paid out.
Undoubtedly, it’s a slow burner! But, if you have the luxury of time and aren’t in urgent need of cash, this could be the best choice for you.
Selling with planning permission
Selling land with planning permission puts you in a strong financial position. And it allows you to request a premium price for your property.
Often referred to as ‘shovel-ready,’ this type of sale indicates that the site has obtained all necessary approvals and technical assessments, making it highly attractive to potential buyers.
With the reduced risk and enhanced convenience associated with these transactions, buyers have the flexibility to proceed with their development plans, adjusting details like the number and mix of housing units according to their preferences.
As you may have gathered, this option offers a fast-track route for buyers. So make sure that your price reflects having the added value of secured planning permission.
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 in no rush, this option undoubtedly has the potential for maximising your profit. But remember, various factors influence land value, including:
- Demand for land in your area
- Accessibility
- Local available services and amenities
- Market trends – i.e value and property prices
- Physical attributes and characteristics
Promotional agreements
Commonly associated with larger pieces of land, promotional agreements entail developers leveraging their financial resources, expertise, and industry knowledge to navigate the planning process with the goal of obtaining planning permission.
Once permission is secured, the landowner agrees to sell their land, with the promoter receiving a predetermined share of the sale proceeds. The percentage of the promoter’s share depends on various factors. These can include the size and location of the land and the level of risk involved.
With this arrangement, the landowner is not burdened with any financial risks—the responsibility lies entirely with the developer (promoter). From the outset, the developer is expected to finance the entire process, including legal expenses associated with initiating the agreement.
This approach alleviates financial concerns for the landowner and is certainly worth considering as a viable selling option.
Have you got a piece of land to sell?
If you have a site that may be suitable for a new housing development, you might have a golden opportunity. Given the current high demand for land in the UK, now is an ideal time to explore these methods to sell your land.
For more advice on how to sell your land, get in touch with a our experts at CR Real Estate today.
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