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Checklist: Selling land for development, and using a land promoter
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Rosconn Strategic Land are experts in obtaining planning permission and maximising financial return on behalf of landowners and are recognised as one of the leading land promotion companies in the UK. Rosconn Strategic Land works closely with its clients throughout the process to find the right purchaser, at the best possible price, ensuring maximum return. This process is carefully carried out in a Trusted, Transparent and Innovative way, ensuring that the entire customer experience is world class.
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In the final part of the Farmers Weekly and Rosconn webinar series on selling land for development, we look at what a land promoter does, and the essential checklist for preparing land for sale.
Landowners wishing to sell land for development will first need to decide how they want to try to sell it.
It is possible to sell land directly to a developer through either an option agreement or conditional contract, or for the landowner to attempt to get planning permission themselves.
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Another option is to enter into a contract with a professional land promoter: The promoter takes on the risks and costs of obtaining planning permission for a residential led development, and doing all the planning and technical due diligence, before trying to sell the land to developers on the landowner’s behalf.
“A promotion agreement may last several years, so it’s really important to find a promoter you can work with through the highs and lows,” says Dan O’Donnell, founder and managing director of Rosconn Strategic Land, a land promoter which works across the UK.
“This pre-preparation, done by the land promoter, helps to increase appeal to developers and maximises the sale value that can be achieved,” he explains.
“Using our team’s technical expertise also means the landowner avoids dealing with the complex planning system.”
There are no upfront costs for the landowner when working with a land promoter, and so no financial risk.
Price is determined through transparent marketing, and since the promoter takes a cut of the sale value, they are incentivised to achieve the highest possible sale price.
Assessing your land’s development potential
“Before signing a promotion agreement, a land promoter will assess whether the land has potential for development, and what level of risk they would therefore be taking on by investing time and money into the planning process,” says Dan.
Daniel Hatcher, planning director at Rosconn, explains: “We regularly review hundreds of sites for potential.
We start with a high level assessment, where we look at major constraints, such as the land being in a national park, on a flood plain, or a site with national monuments.
We also ask our team and wider consultants for advice.”
If the land parcel passes this test, a detailed site review will be conducted, to look at specific issues such as ecology and potential harm to the landscape.
“We also take into consideration current planning policy and the political climate, as the latter can have a sudden and rapid impact on determining planning applications,” says Daniel.
“Planning reform has taken a back seat recently, but the housing minister has said a Planning Bill is likely early this year.”
Checklist: What to do before selling your land
Well before trying to sell land for development, there are multiple steps a landowner can take to ensure a successful sale, says Nick Carr, operations director at Rosconn. “Investing time in going through this checklist will help make the sale process smoother.”
1. Check the title
If your property is not registered with the Land Registry, register it by providing the title deeds, or other evidence that you are the owner.
If your property is registered, is the title up to date with you as the named owner? If you’ve inherited the land, this detail may have been missed, but needs addressing with probate. What entries (mortgages, leases and restrictions) are on the title?
If the entire property is mortgaged and only part is being sold, you will need the mortgagee’s permission to sell it.
You may also need permission from a third party, such as a neighbour, if a restrictive covenant is in place that limits development.
If it exists on just one part of the land, consider removing this area from the development plan.
2. Plan early for vacant possession
If your property is let you will need to make plans early to gain vacant possession. A Farm Business Tenancy (FBT) – typically made after 1 September 1995 – has a minimum notice to quit period of 12 months.
If the tenancy predates September 1995, it will be an Agriculture Holdings Act (AHA) tenancy, giving the tenant lifetime security of tenure. AHAs that predate 12 July 1984 have statutory succession rights too.
It is possible to serve notice to quit (usually 12 months) to AHAs if the land is going to be used for non-agricultural use.
Tenants may be entitled to compensation for disturbance of their tenancy and improvements to the land they have made. An Assured Shorthand Tenancy (AST) covers residential property, and usually requires a two-month notice to quit.
3. Consider practicalities of what is being sold
Think of the practical impacts of what you are selling – if this involves land with livestock sheds, where will you house stock?
If the sale includes cropped land, time the sale so that you can harvest your last crop, and are not investing in a new crop you can’t harvest.
How will your remaining land interact with the sold land? For example, what will the boundary structure be between the two?
If this requires building and planning permission, such as for a landscape feature, include it in the master plan.
Consider other practicalities like drainage, access, and services including water and electricity – how will you access these, particularly if you want to develop more land in the future?
Ensure you retain rights over the land being sold in some way if this is the case.
4. Make the buyer’s job easy
The buyer will raise what’s called Commercial Property Standard Enquiries (CPSES) – this includes searches under the Highways, Local and Environmental Authorities. To speed things up you can commission these yourself.
5. Get advice on VAT registration
If you employ a promoter to sell your land, it is possible to recover the VAT from HMRC by registering for VAT when you submit a return. Get advice from an experienced accountant.