What Landowners Should Know Before Selling to a Luxury Developer

Selling your land in the UK to a luxury property developer can be easier than selling to a buyer who belongs to a property chain. However, if you are a property owner, you should know that it is not only about the location and the price of the land. You should be aware of the planning permission and potential for development, and have a proper negotiation strategy.

If you own a piece of land in the countryside of Surrey or the areas of outer London, you must recognise its actual value. It will help you approach the luxury home developer with a clear sales strategy. In this Discussion, you will know how a landowner should maximise their gain when selling the land to a luxury home developer.

Assessing the Development Potential of Your Land

Before selling the land to the luxury house developer, assess the land’s potential. If your land is easily accessible with local amenities such as shopping malls, schools, and markets, your property value will be higher. Moreover, if the land is easily accessible from a nearby airport, it will yield significant value.

The luxury house developer can be interested in your property if it is not in a flood zone or within a conservation area. Luxury house buyers would not want a property with compliance issues. To understand the actual market value of your land, conduct a survey. You can also perform a preliminary planning assessment to see if the site is fit for luxury house development.

Understanding Planning Permission and Its Impact on Value

Planning permission can significantly increase your property value. If the luxury house development project is a large one, you can go for the outline planning permission. It gives you the permission to evaluate the suitability of the property and develop an outline plan without too many details.

Alternatively, a full planning permission can be obtained from the local authority, along with specific details of the project. If you already have planning permission for any of this, the luxury home developer might be very interested in your property. This is because he would not have spent time getting planning permissions. He can start the project as soon as possible.

Choosing Between an Outright Sale and a Joint Venture

If you have already decided to sell the land, consider your options thoroughly before the sale. A luxury house developer may offer you instant cash to buy the property. You will have minimal Risk factors to handle, but it will not be enough value in the long term.

To maximise the long-term value of your property, consider opting for joint venture construction. Look for a luxury home developer who is ready to start a joint venture to build the luxury home on your land. This way, you will be one of the owners of the luxury house. You can reap the benefits of a high return on investment on the luxury homes within a few years.

Prepare for the Legal & Financial Due Diligence

Before selling the land to the property developer, make sure that you have the right Land Registry title document and a proper boundary around the piece of land. Moreover, if you want to put a restriction on the buyer regarding construction work on the land, you should prepare a restrictive covenant. It signifies that both you and the buyer have agreed not to carry out specific construction work on the ground.

If your land is located in an area with easy accessibility and has the potential to appreciate shortly, you can consider an overage agreement with the property developer. With such an agreement in place, you can financially benefit from the sales of the luxury house in future when its value increases.

However, the best course of action would be to contact a UK solicitor with experience in land sales and related agreements. He will help you negotiate for the land and get the best value for it.

Negotiate Terms to Protect Long-Term Interests

If your land is in a premium area, don’t accept the first price your developer offers you. Negotiate your terms and price. Contact an RICS-accredited surveyor to know the actual value of your land. Premium areas, for example, Wimbledon Village or St Albans, can yield high returns in future.

If a large piece of land is for sale, do not sell it all at once. Instead, you can sell it in phases, allowing you to enjoy flexibility. You can also sell the land at a higher price in the future when the market price rises.

Conclusion

If you have decided to sell your land to a luxury home developer, it can be a transformative decision. However, maintain legal and financial due diligence before finalising the deal. If you own A large piece of land, sell it in phases. Once the luxury house construction is complete on one part of the land, the value of the remaining land will increase.

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