Selling land with development potential
Discussion
Hi all
Seeking advice. My parents own some land (approx 1 acre), this has been submitted for consideration for the next development allocation plan but when they had a council survey a number of objections were brought up. None the less I suspect planning permission could be obtained with sufficient money spent. They've had professional advice to that extent but figures of 50-60k were mentioned. My parents are not inclined to spend the money to gamble on this.
Someone has offered to buy the land at more than agricultural value but, at a guess, at about a 10th the value should it gain PP. In initial discussion they have said no covenants at this price.
Are they mad to sell without an uplift clause?
As I sit and type this I'm more and more convinced that they just need to get it professionally valued, although the likelihood of getting PP is a bit of finger in the air job I suspect.
Seeking advice. My parents own some land (approx 1 acre), this has been submitted for consideration for the next development allocation plan but when they had a council survey a number of objections were brought up. None the less I suspect planning permission could be obtained with sufficient money spent. They've had professional advice to that extent but figures of 50-60k were mentioned. My parents are not inclined to spend the money to gamble on this.
Someone has offered to buy the land at more than agricultural value but, at a guess, at about a 10th the value should it gain PP. In initial discussion they have said no covenants at this price.
Are they mad to sell without an uplift clause?
As I sit and type this I'm more and more convinced that they just need to get it professionally valued, although the likelihood of getting PP is a bit of finger in the air job I suspect.
FredClogs said:
1 acre? So 2 decent 4 bed houses. £50 to £60k to get planning permission? I don't see how. Why not just spend a few hundred quid with a local architect or architectural tech and get something submitted and see what happens, go from there.
Complex access issues and very close to a site of special scientific interest, was green belt (may still be, thinking about it, but between two existing houses). And I suppose it's value lies not in PP for 2 good houses but in 8 not so good.hornetrider said:
Would not sell without a development uplift.
That was my initial response, but if loses an easy sale that would be annoying. I suppose to my mind there are two values, one with uplift and one without. But how far apart should they be?
Sevo said:
Are they mad to sell without an uplift clause?
Yes. As a box of frogs.Sevo said:
although the likelihood of getting PP is a bit of finger in the air job I suspect.
The answer to ensuring they get full value for the land is to seek Outline Planning permission before marketing it - that way it ceases to be speculative on the part of the purchaser.A decent Planning specialist (such as myself
) will also be able to review local policy and housing supply and give a much better idea of its chances, before you spend serious money on such an outline application, too.Even if you fail to gain Outline PP, you should certainly include an uplift clause in the contract, but the value will be much higher if you obtain PP, as you're turning possible development potential into a certainty.
Contact me via my profile if you're serious about it.
FredClogs said:
1 acre? So 2 decent 4 bed houses. £50 to £60k to get planning permission? I don't see how. Why not just spend a few hundred quid with a local architect or architectural tech and get something submitted and see what happens, go from there.
It depends on site constraints (and larger sites tend to be less constrained and therefore more efficient), but modern housing developments are typically closer to 14-16 dwellings per acre. Until quite recently, there was aminimum density requirement of around 12 dwellings per acre before Planning would be granted (to ensure scarce building land was properly exploited).It's more about planning policy than design, these days, though - particularly since what the OP would be interested in is an Outline permission with all matters reserved - so what he doesn't want is to spend a few £hundred with a local architect or architectural technician. He wants to spend a few £hundred with a specialist in Planning and development potential, who understands national and local Planning policy and can promote the site to its best potential with the LPA.
I agree that unless there are serious complexities involved, though, it shouldn't cost anywhere near £50-£60K to get a 1 acre site through Planning.
anonymous said:
[redacted]
I see what you are saying, but if you are risk averse spending a significant sum of money with a chance of seeing nothing back is a little alarming. It is not a straightforward plot to get permission on.Uplift clauses sound pretty common, so it's not an odd thing to do, and it strikes me as a not unreasonable deal for both parties if priced right. I do worry about how watertight they are though, as you seem to be alluding to.
We allow £100k to get detailed planning on a half acre site so £50k isn't unreasonable. Personally I would go for outline consent before selling, but if you really just want to sell make sure you get an uplift clause.
On 1 acre, I reckon I can get up to 40 apartments or 15 houses (including some detached).
On 1 acre, I reckon I can get up to 40 apartments or 15 houses (including some detached).
blueg33 said:
We allow £100k to get detailed planning on a half acre site so £50k isn't unreasonable.
£50K for Outline (which is what the OP will be needing)?!Do you want another architect/planning consultant, by any chance (serious question)?
We're operating at way less than that...
I've recently gained Outline consent for up to 42 dwellings on a 2.5 acre, and just today submitted two Outline applications for 19 units on a pair of sites totaling around an acre. Both projects cost the clients comfortably less less than £10K, including indicative layouts and streetscapes, supported by house type plans (mainly to assist their viability assessments), all consultant fees and LPA application fees.
Admittedly, both were fairly straightforward sites (albeit in high flood risk, so required FRA's), and obviously there is a LOT less work involved in an all-matters-reserved Outline than a detailed application, but I know from my developer days that larger developers are seen as a gravy train... by contrast, you simply can't charge those sorts of fees for smaller developers/landowners. We don't have teams of graphic designers and architectural illustrators producing glossy documents (though we can if you want us to), but it doesn't seem to make much difference to our results.
Density will depend on site location, of course: apartments won't work everywhere.
What about trying to find someone who'll buy it subject to planning.
It's been ages since I worked on residential schemes but when I did it isn't unusual for developers to sign a seller up to a contract where by the developer would deal with the planning and if success would pay an agreed amount for the land, if planning wasn't granted all just walk away from the deal.
Land value was obviously somewhere in the middle between land without and land with planning.
It's been ages since I worked on residential schemes but when I did it isn't unusual for developers to sign a seller up to a contract where by the developer would deal with the planning and if success would pay an agreed amount for the land, if planning wasn't granted all just walk away from the deal.
Land value was obviously somewhere in the middle between land without and land with planning.
hornetrider said:
magooagain said:
OP. If outline pp was gained and houses built at some point what effect will it have on your parents lives? Apart from money in the bank.
I don't see the point in this question at all?We've got full planning permission, via two different schemes on a site of about that size and I suspect we are under £10k including planning fees.
As for uplift (or overage clauses) as we would call them, they are a minefield to draft, there are often ways to circumvent them and as a buyer I would be reluctant to entertain one.
I'm of the view that if the seller is not willing to put in the time, effort and money to make the site something which it isn't currently then the seller shouldn't really be benefitting from it. I know it's common practice, but I'm not a fan as a buyer.
As for uplift (or overage clauses) as we would call them, they are a minefield to draft, there are often ways to circumvent them and as a buyer I would be reluctant to entertain one.
I'm of the view that if the seller is not willing to put in the time, effort and money to make the site something which it isn't currently then the seller shouldn't really be benefitting from it. I know it's common practice, but I'm not a fan as a buyer.
andye30m3 said:
What about trying to find someone who'll buy it subject to planning.
...Land value was obviously somewhere in the middle between land without and land with planning.
Yes, this is always an option, but you've answered your own question: value is higher, and the pool of potential buyers bigger, if you get an Outline for it before it goes on the market....Land value was obviously somewhere in the middle between land without and land with planning.
And the pool is infested with sharks, so you need to be very careful of the deal you sign up to... 'option' deals are more complicated and costly in legal fees (if you don't watch it, you can end up paying more to the lawyers than you would have to gain an Outline), so need more care and experience.
Muncher said:
I'm of the view that if the seller is not willing to put in the time, effort and money to make the site something which it isn't currently then the seller shouldn't really be benefiting from it. I know it's common practice, but I'm not a fan as a buyer.
I have to say that I agree with you on this - particularly on sites where the Planning risk is high. It leaves a very sour taste in the mouth where a vendor expects you to take all the risk, and them to make all (or most) of the profit.Mr Pointy said:
hornetrider said:
magooagain said:
OP. If outline pp was gained and houses built at some point what effect will it have on your parents lives? Apart from money in the bank.
I don't see the point in this question at all?But after some more thought today,it could well be the answer to thier possible worries of care etc as they go into older age. Who knows eh!
But the projects well worth thinking hard about.
Thanks all for the responses. Turns out the figures I had for costs were to full PP not Outline as pointed out.
Since my post they've had an offer that for a variety of reasons, several non financial, works better and includes a covenant. Bit reluctant to go in to too much detail on the net.
Land development does not affect them if it ever happens.
Since my post they've had an offer that for a variety of reasons, several non financial, works better and includes a covenant. Bit reluctant to go in to too much detail on the net.
Land development does not affect them if it ever happens.
Equus said:
Contact me via my profile if you're serious about it.
I sent you a PM, not sure if it made it? But as above, probably irrelevant now, just didn't want you to think I'd ignored the kind offer of advice.Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff