Last updated: Wednesday, 6th March 2013, 14:20
There has been plenty of talk in the media about “The Government making planning for housing easier” but is that really the case? John Amos FRICS FAAV has over 35 year’s experience as a Rural Surveyor and does not share that view!
“The reality is that in most cases, planning issues tend to create barriers rather than facilitate development. The problem is, many people will only get one opportunity (if they are lucky!) to promote land on the edge of a city, town or village. This creates the inevitable problem that the landowner has no experience in taking a potential development site forward.” says John.
There are a number of ways of promoting land, dependent on the circumstances, however in most cases, it will not promote itself! The starting point is to find an independent agent to advise you on your options and plan a way forward.
The planning process required a huge amount of detail and technical information including Highways, Traffic Surveys, Ecological report, ground condition reports (to name a few) and all of this before you even start to think about looking to apply for planning!
Regardless of who takes the land forward to promote it, a team of relevant experts will need to be assembled to move the project on.
Some landowners will have sufficient funds and business acumen to promote a project themselves but in many cases, it is preferable to pass the risk element to a developer or promoter through an option agreement, who takes responsibility to obtain consent and bears those costs, which can be substantial. The reward for this is that the developer will buy the land at a discounted price or the promoter will take a % of the sale price based on success.
Negotiating the terms of an option is extremely important because this essentially becomes the contract of sale and often things that appear insignificant at the onset can become extreme issues when it is too late! For example, if you agree an option direct with a developer, once planning is granted and they wish to purchase, it is in their interests to negotiate a lower price where possible, therefore a mechanism for agreeing the price should be agreed in advance, including for example how to deal with infrastructure costs, planning costs and non-developable land. As they say “The Devil is in the detail!”
Whilst development land prices are not nearly as high as they were, demand for sites is certainly increasing and forward thinking builders and developers are looking to acquire sites now in readiness for any upturn in the housing market in the future.
Once planning is obtained, it is important to offer the site to a wide buyer profile, to ensure you get the best all round deal. In many cases, tender proves to be the preferred method of sale where of course, the seller can consider both the price and the terms before coming to a decision.
For anyone contemplating promotion of potential development land John can be contacted by email, firstname.lastname@example.org or telephone 01568 610007.