How to sell development land

We’re are happy to prepare an outline valuation appraisal to help you understand the value of your land. Selling development land is complex. Trusted advisors add more value to a prospective development than the cost of their services.

We receive many emails and calls from landowners looking to sell their land or establish its development potential. Everwoods are experts in development land valuation and agency.

As a private practice and in previous roles we have transacted on nearly one hundred million land value of sites in the past five years.

We sell development land professionally and have had over 25 years of experience in the UK house-building sector. We work with private individuals, and land owners as well as developers looking to sell sites on the open market.

“Supporting accurate, forensic analysis of a lands development potential and prospective value.”

Selling development land takes time if you have no planning consent in place. Please read our FAQ below, which will help you when selling land for development.

How To Sell Development land FAQ

1 Analyse initial development potential. Please send us photos of the windows overlooking the site. Also photos of the height of buildings nearby, and any known new-build development nearby. As a consultancy we deal in forensic development valuations. We like hard granular facts, and developers we deal with appreciate this approach.

2 Due diligence. When preparing to sell land for development in the uk, the right due diligence, done early, enables the right type of planning application and the right remediation to on site problems. This maximises land value. A bad planning application can prejudice future development.

3 Understanding timescales. If you do not have planning consent, selling your land will be via one of two approaches. Firstly, there is the unconditional bid. This is an immediate sale, where the developer takes a risk on your site. In other words, the land price will often be lower. Then there is ‘subject to planning’, which will be a slower sale. However, it will often be at a higher price. Unconditional means a developer will pay for the site exactly as it is, at its current state of planning readiness. A developer has to price in risk of not getting a satisfactory planning consent. Hence that risk means a lower land value.

We see time and time again, estate agent style land agents promising the moon. However, then they deliver mixed results. Often with blame being apportioned to ‘greedy developers’. Nine times out of ten this is due to a land agent not working with realistic risk appraisals. The best way to sell development land is to resolve as much risk as you can. Then, assist a sensible developer in resolving the remaining risks. In addition, making sure that you are selling to a company who has the funds to complete the sale. We can help you resolve small issues before they become large problems.

There are strategies we can deploy for maximising land value even on contentious sites. If you have a site without planing consent, that you wish to sell as development land, please indicate your appetite for land value to desired timescales and any previous planing application history.

You may seek to apply for planning consent on your own land. We can advice you on the chances of your land getting planning consent, the likely cost of doing so and the best approaches to take for maximizing development scheme layout and abnormals. If you wish to sell your land ‘subject to planning’, this means a deposit on the land will be paid, and then the developer will pay for the planning application. Should the application be successful, then the balance of the agreed land price will be paid to you

4 If you have an existing planning consent we can act for you to gain best value. Our rates (between 1-2 % of the development land value) are always less than the extra value we bring to the table by extracting best value from developers. There are ways of supporting a development company with facts and risk reduction to gain the largest possible land value. Believe it or not, a site with planning consent, known build costs, and known sales prices can generate wildly differing land bids from developers. Be aware, open bids often will often attract less stable prices and bids that will sometimes leave sellers of land waiting months or even years to close a deal. Approaching a select group of developers known to preform and who have funds to pay the asking price is often the best way to sell sites of under 30-50 units.

5 Environmental issues. When selling land for development, the cost of cleaning up pollution from previous uses, such as a car garage, or industrial unit, will impact final land value. There are ways we can suggest to developers and landowners for more cost effective remediation of contamination or environmental issues, along with tax breaks for clearing up contaminated land suitable for development. Please advice us of any previous uses or environmental issues when we value your development land.

6 Rights of way. Long use of a footpath through your land, even on a causal basis, can create a right of way over the land. This can result in significantly less developable area for a development scheme. This is mainly, but not always, a situation for greenfield sites. We can advice on ways to control the risk of ‘footpath spread’.

7 Land promotion agreements. We would recommend taking to us before entering into one of these with a developer or planning consultancy. A land promotion agreement should be entered into with caution. It is often more beneficial for a land owner to secure a formal subject to planning contract, so long the heads of terms have worked out. The terms need to be as broad and protective as possible, while still being reasonable for the developer.

We can assist you in heads of terms negotiation, or can act for you directly and as your representative should you embark on a land promotion agreement.

8 Overage and title. An overage entitles a party to receive a payment at a later date based on a trigger event. Sometimes this is the grant of planning consent for a development scheme. Things to be mindful are, how long an overage will last for. The formula for how payments will be calculated. Plus what obligations if any are and who they apply to. Selling development land with hidden issues such as defective title can also harm its value.

If your land has boundary problems, restrictive covenants, easement problems, unregistered titles, or missing documents, then the price of development land when sold can be affected. These issues can be resolved, but it pays to make the land and title good and marketable in advance. Our advice is that its almost always cheaper for land owners to resolve defective title themselves. It is more risky to leave it to a developer.

9 Tenancies. Sitting tenants with protected tenancies, long term leases or informal arrangements can harm the value of land sold for development. To maximise value, a land owner selling a development site will almost always be required to deliver a narrative or a route for vacant possession. Vacant possession is often delivered inline with when planning permission is granted, or on commencement of building works.

10 Right to light. We can consult on this specialist area for properties in dense brownfield locations such as London.

How land price is calculated when you sell land for development

This is a specialist area, and we recommend sending us site plans, photos, and as much detail as possible. This enables producing of a realistic land value. The steps of an rough outline valuation are as follows :

1 Number of units. The first is to ascertain the gross development value or G.D.V. In rough terms, this is the number of units that could be fitted into a planning application. Then multiplied by the value of each unit at time of sale, be it residential or commercial.

2 Site abnormals. Be this easements, contamination, rights to light, ground and foundation conditions, environmental impact studies or other specialist areas. This can be guesstimated, but for formal valuations boreholes, and environmental contractors may be needed.

3 Approximate build costs. These vary wildly between developers and house-builders. No matter what a land agent claims, true build costs are a closely guarded trade secret. The advantage of working with a consultancy such as ourselves is that we know ‘developer speak / Housebuilder speak’. There is often a divergence between true development costs and even bank funding appraisal or redbook valuations. For some sites a developer may be able to push more keenly. We can work on your behalf to achieve this.

4 Finance costs. Lending on development sites can vary from 50% of build costs all the way up to 90% of build costs depending on developer track record, asset security and managing team. General senior debt costs at normal bank lending rates can be added here, with a simple 1-2% of total lending facility applied as bank fees. The duration of the development site build provides an idea of how long interest will be accrued on the land and build costs. We can broker favorable terms on the sale of a development site so that you maximise land sale value by strategies such as deferred payments and delayed completions.

5 Professional fees. Its inadvisable to allow the use of blanket percentages for fees. In every case a direct quote from an employers agent, planning consultant, architect or QS will result in more accurate valuation appraisals, and often, a better land price.

Taking the above costs and revenue enables to production of a rough outline valuation of a development site.

The best way to sell development land or development sites is to know the most realistic possible asking price. Thus being forewarned, negotiations with developers can take place realistically.

We can advise you on the best way to sell development land.

If you have any questions about development sites, selling land or have a general query please feel free to contact us on the form below, and a member of our team will be happy to assist you.

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