Selling land for development is a high stakes game. Don’t come to the table ill-prepared says Nick Woolley of Woolley & Co
You’ll want as much money as you can make as quickly as you can get it – but developers play a longer and broader game. Land you sell may become one small part of their land bank in your locality and, if you’ve signed the wrong deal, you may find they never get planning permission for your land because they choose to promote one of their other local sites which looks an easier consent to win.
Opt for a conditional contract instead. This requires the developer to purchase your land as soon as consent is obtained and whether or not it suits them. It should also commit them to use ‘best endeavours’ to take forward the process of securing planning permission – often in accordance with target dates.
Once the developer has achieved planning permission and wants to buy your land, they’ll issue a ‘Price Notice. The final price they offer you will be based on:
Developers inevitably try to maximise exclusions in a bid to drive down the final net price. In some instances, up to 50% of the total acreage can be wiped off the overall size of a site in net terms by the time ‘undevelopable’ land is discounted – so be on your guard!
Selling land to a developer can, of course, be highly lucrative and is an increasingly attractive option for many farmers – and rightly so. But I’ve worked with many farmers over the years who have felt unfairly treated either by the planning process or by a developer – or both – so I’m just sounding a word of warning.
It’s a complicated business and not something to be tackled half-heartedly. Lack of preparation or understanding of the complex issues involved will be punished heavily – so invest in decent and well informed advice. There really is no substitute and the consequences if you don’t could be disappointing or even disastrous.
Contact Nick for a free initial consultation: 01638 721540 or firstname.lastname@example.org
Nick Woolley is a former Chief Land Agent of Prudential Corporation and a Director of its Property Division. Since founding Woolley & Co (www.woolley.co.uk), he advises landowners on the effective management of their land and property assets and is an expert on sustainable building
Farmer’s Guardian | 9 November 2007November 9th, 2007