Are you thinking about selling some or all of your land to a developer? Whether it’s a back garden, a field, or a larger parcel on the edge of town, selling land can be a great opportunity—but it’s not always straightforward.
Before jumping in, here are some important things to consider to make sure you’re getting the best deal and avoiding common mistakes.
1. Is Your Land Ready for Development?
Developers are mainly interested in land they can build on quickly. If your land already has planning permission, it’s usually worth more. If it doesn’t, that’s okay—but expect developers to want time to apply for it themselves before committing to buy.
Even without planning permission, you should consider contacting your local planning authority to check the land’s current designation and future potential under the Local Plan. If it has been earmarked as suitable for development, this will significantly improve the prospects of a sale.
You may be contacted by a developer who has identified your land as having development potential or there are planning consultants available who will help you assess your land if required.
2. What Type of Sale Works Best for You?
There are a few different ways to sell land to a developer, and each one suits different situations:
- Outright sale: You sell the land and get paid. This is generally only suitable for land with planning permission in place.
- Conditional sale: the developer agrees to buy your land subject to satisfying conditions, usually the grant of an appropriate planning permission, or perhaps securing access or service rights.
- Option agreement: The developer pays a small fee for the option to buy your land later, usually after securing planning permission. This is suitable where there is a good prospect of getting permission.
- Promotion agreement: A promoter works to get planning permission and sells the land for you—then you split the proceeds. This is often used where a longer term approach is needed, or perhaps where more than just your land is involved.
In all sales, it is worth considering overage, i.e. the entitlement to a further payment in the future if certain circumstances arise, such as further planning permission being obtained. This can be a useful device if you want an outright sale but you think there is more value in the land than the developer is willing to pay now.
3. Don’t Sell Yourself Short—Get a Proper Valuation
Land values can vary massively depending on location, planning status, access, and nearby infrastructure. A chartered surveyor or land agent can help you understand what your land is, or could be, worth.
Even land without planning permission can still be valuable if it is in the right place, for example if it helps to provide access or services to adjacent development.
And don’t forget tax—Capital Gains Tax could apply if your land has gone up in value. An accountant or other tax adviser should be consulted at an early stage.
4. Check the Legal Details
Before selling, make sure everything is in order. Developers will want to know:
- Who owns the land.
- If there are any covenants or restrictions.
- Whether there is access and the normal utility connections.
- Whether there are any environmental or flood risks.
Some of these factors will impact on value but others may prohibit development altogether so an early review can be useful.
5. Choose the Right Developer
Not all developers are created equal. Some may make offers that sound great at first but are full of conditions or delays. Some will only be interested in getting planning permission and then selling the land on again for a profit rather than actually building.
Think about what is important to you and look for developers with a solid track record, realistic plans, and a clear timeline.
Final Thoughts
Selling land to a developer can unlock serious value—but only if you are prepared. Understand what your land is worth, choose the right type of sale, and make sure the legal side is watertight. With the right support, selling your land can be a smart financial move but without it you can end up handing over the profit to someone else.
It is best to always use a qualified solicitor to help you review any agreement before signing. For more information – contact me or any member of Dawson Hart’s commercial property team for a free initial consultation today on 01825 762281