Selling land with potential for residential development in the UK is not as straightforward as you might hope – even if there is a strong demand in your area for sites of a similar profile to yours.
The process can be complex and overwhelming, but with the right preparation and expert insight, it can be life-changing for landowners. It can unlock significant funds that can be used to fulfil life goals.
Whether you are a private or commercial landowner looking to sell your land for development, or a housebuilder, promoter or housing association looking to acquire land for inclusion in your build programme or development portfolio, the following tips will help you make informed decisions.
1. Understanding the possible value of your land
In development terms, the value of land is determined by what can be built on it, so when faced with an open field or a derelict brownfield site, it is not possible to apply an accurate, predicted development value until a proposed scheme has been drawn and a cost analysis undertaken and even then, there is no guarantee permission will be granted for what is proposed or that market conditions will remain stable until a land sale or acquisition is transacted, all of which can significantly impact on the land value. As a landowner, the only initial decision to make when considering a sale for development, is whether you wish to go through a process to establish an idea of value. It is important to note, that making this decision does not obligate you to sell. A list of reputable and reliable buyers would be produced and agreed before details of your land is circulated to them together with a bid date, bid protocol and information to be included within any offer of purchase.
2. Market demand
Having an up-to-date understanding of the local property market and industry trends will be a critical part of the process. You’ll need to understand average sale prices of land with a similar profile in your area, as well as the market demand for development sites locally. Having this information will help you negotiate the best deal with.
3. Legal considerations
Before thinking about offering your land for sale, it is important to make sure your legal documents are in order to avoid disrupting or delaying the process further down the line. You don’t want to lose out by not having your paperwork organised. Having these details to hand will also avoid any potential disputes and speed up the process. Make sure you have copies of your title deeds, any surveys previously carried out, and information relating to any historical planning applications, decisions, permissions or allocations on your land .
4. Use a reputable land agent
Negotiations can be stressful, especially when this may not be your area of expertise. What you want from the deal will likely not be precisely aligned with what the buyer is looking to achieve. A land agent will guide you through the entire sales process, from knowing how to market your property to attracting the best potential offers and understanding the right time to place your site in front of housebuilders and promoters actively seeking sites like yours. They will then negotiate with potential buyers, having first listened carefully to your aspirations for the sale so they can aim to achieve your goals as part of the deal.
5. Understand the optimum potential
Knowing what the development potential of your land is will help you when it comes to pinpointing who to approach and when. Key to any development potential is access. If the proposed site is landlocked, third party negotiations will be required to establish a viable route in before the land can realistically be offered to potential buyers. Is your land suitable for residential or commercial use and if so, on what timeframe? Is it within the settlement boundary? Or is it in a rural location on greenbelt land. Would it be possible divide your land into smaller parcels? The development potential of your site will greatly impact its value, so this may be worth exploring early on in the process before listing it on the market. Land agents can advise you on the best approach to maximise your return.
6. Market your land effectively
Selling land for development requires specialist knowledge, and effective marketing will be key to attracting the right buyers. With larger sites, you will need to consider whether tools like aerial photography will help showcase your land’s best features. How will you reach the highest-paying buyers? What relevant contacts do you have in the industry? While social media and online real estate platforms are helpful tools, many deals are brokered through relationship marketing.
7. Be prepared for strong negotiations
Land sales almost always result in the need for delicate negotiations at some point in the process – by virtue of the fact both sides want the very best terms. But what really matters to landowners isn’t always the figures. It often goes much deeper than that. At Searls Land we find our clients are often concerned about what the land might be used for – how it will benefit the community, what positive impact will the sale have on the environment etc. When you use a reputable land agent, they will take all of this into consideration and will also be looking out for additional opportunities to build value into the transaction for you along the way, like finding a buyer in a position to move quickly if time is of the essence for you. The secret to an excellent negotiation is to know exactly what both buyer and seller want and try to agree on terms that will work well for all parties involved. You may need to be prepared to compromise along the way to reach a mutually beneficial agreement but make sure you have a clear understanding of your goals from the start.
8. Know when to sell
The timing of when you offer your land for sale could significantly impact the value and offer you achieve. If you’re trying to do this on your own, research the current market conditions and understand the demand for land in your area when determining the best time to offer your land for sale.
9. Be patient
Negotiating land deals can take time – particularly if the development potential of the site is unknown. While you may get initial interest in your site, potential buyers may have to go through the process of establishing whether there is a likelihood that planning permission can be achieved in the future. This all takes time, to carry out the necessary surveys, pre app discussions and applications to local planning authorities. Land agents will be able to keep you informed every step of the way and can sometimes help speed up the process by ensuring you avoid unnecessary delays.
Selling land in the UK can be a complex and protracted process. The more preparation you carry out and expert guidance you seek, the more likely you are to achieve a rewarding outcome and enjoy a stress-free experience. If you are thinking of selling your land, schedule a call with one of our land managers, who can help you navigate the process to get you the best possible outcome.