How to sell your land for property development

30/9/21
Emma Davey
Development

If you’re considering selling your land for property development, the process may not be as simple as you think. But with housing development land in high demand due to the UK’s housing crisis, councils and developers are actively looking for residential development, putting you in a great position to take advantage of the commercial opportunities.

How do I sell my land to a property developer?

There are three main ways that you can approach selling a piece of land, all of which revolve around planning permission.

1. Selling without planning permission

This is the fastest way to sell your land, but will result in the lowest value. The price a buyer is willing to pay for the land will be affected by their evaluation of the level of risk. Without the planning permission confirmed, their ability to build on that land and therefore make money will be at risk.

2. Selling on a “subject to planning permission” basis

A conditional contract, whereby the buyer secures the planning permission before purchasing, is just one of the ways to avoid the prior issue. The uncertainties of securing the permission still remain, but the buyer has no risk as they do not need to buy if the permission is rejected. With the final risk reduced, the amount they are prepared to pay increases and therefore more economic benefit to you, the seller.

It can take some time to prepare and get approval for the planning permission, which means this sell can also take some time before the purchase is finalised.

3. Selling with planning permission

You can completely remove the planning risk for developers by obtaining your own planning permission. The easiest way to achieve this is by securing an ‘outline planning permission’, which approves housing on a site but also allows for some further details to be decided in the future. The outline permission will provide the buyers with the certainty that they need while also allowing them flexibility.

How much is land worth to a developer?

You may be wondering how much your land is worth, but the value of land is complex and dependent on a variety of factors.

  • What can be built on the land? This will depend on the on size, shape, slope and location.
  • How much will the land be worth once the development is complete?
  • What will the build cost? Including demolition costs, construction materials and labour, skilled trades and other overheads.
  • What is the profit margin?

Essentially, the value of your land is worth the amount that the buyer is willing to pay for it, and the financial return that the buyer can achieve themselves.

Do you pay tax on selling land?

You may have to pay Capital Gains Tax if you make a profit when selling a property that’s not your home, including land, business premises, inherited property and buy-to-let properties. Other taxes you may have to consider include: Income Tax, Inheritance Tax, Value Added Tax, and Stamp Duty Land Tax. Professional advice should be sought to ensure the transaction is in the most tax efficient way possible, and that any reliefs and exemptions available are taken advantage of.

Top tips for selling land for the best price

1. Work with experienced professional agent. Selling your land is not a simple process, with numerous steps from the initial assessments of the land, through to close co-operation with land agents to close the deal. In order to get the best deal, you should find knowledgable land agents that you trust to represent your interests and can navigate the complex sales process.

2. Maximise the value of your land. As discussed previously, the land is only worth as much as the developer is willing to pay. This gives you the opportunity to work with the industry experts to identify the land use and development that will bring the highest value. For example, agricultural land gets its value from the produce that can be farmed there, while a field with planning permission will be very lucrative in residential areas. Knowing the use of your land will allow you to target the right people and maximise its value.

3. Get your title sorted. A title refers to a document that lists the legal owner of a piece of property, and it is an important part of the land selling process. Failing to sort your title out will lead to issues that scare away developers and delay the sale of your land.

Bruckland Developments are actively looking to acquire land that is situated in the south-east of the UK, in desirable locations suitable for residential development. Whether you are a company disposing of land, an agent, or an individual selling a plot, we are interested in working with you! Alternatively, if you have land that you are looking to develop for a personal project, our expert team can advise you on your options. We can assess the potential that any land offers for development and can guide you through the planning and development process from its start to completion.