Can you talk me through the order of selling land for development

[OscarsWild]

I WILL be talking to a solicitor but would appreciate some basic info.

My mum is looking ahead to when she dies (she's in her 90s.)

Her large garden is 'ripe for development'- possibly 10 homes.
She's talking about the process and us as a family getting our ducks in a row.

So....if we sell the house and the plot to a developer, who applies for planning permission and who draws up such plans?
-Would that be the builder?
-Would we need outline PP before the sale to them?
-Or would they buy on the basis that they fight for PP themselves?
-Do we stand to gain more financially by having PP first, as outline only?

I've noticed that where I live, planning applications are usually made on behalf of the land owner by an architect or the developer.

Which is best and why?

Speak to a local estate agent who will be able to advise.

Land with planning permission (even outline planning permission) commands a higher price than land without.
There is also the option of an uplift clause which is complicated but basically means that your family could profit from any further development of the land after it is sold.

It would be more beneficial to you (from a finance side of things) to get the planning before you sell. It will a achieve a much higher asking price and be more desirable. Having said that, it will cost you money to get the initial planning and also time/effort but in my opinion more than worth it.

From my understanding, it will be either/or. If you were to sell how it is now, without PP, you would command probably a decent price. However, if you were to get PP, you could command a much higher price.

You would be best placed speaking to an architect/ design company about drawings, and to your local planning authority about what they might have a preference for- there's no point putting in planning for 10 terraced town houses, if you are in an area that they are trying to preserve, and they would give a maximum of 3 detached in keeping with the current country cottage style.

However, PP does only last for a set period of time (I think 2 years) unless work is started, it costs a decent amount to get drawings done and it can take forever to get PP- even if they give you guidance and say we want to see this and this, they can then turn it down and you have to reapply. It's very much something that takes stress, time and money now (thousands), in order to get the larger pay off.

As a rough guide, at work we use a local drawing firm for single house renovations, it costs us about £1200 for the drawings to be made up, so I would imaging lots more for 10 new builds. It will tell you on your local council website how much planning application fees are, depending on how large the land is. Ours is £462 for every 0.1 hectare of land, or if the site is over 2.5 hectares, a flat fee of £11k + is charged + £138 per 0.1 hectares.

Personally, I would start by sounding out your local planning officer, whether they would be open to the development- you can normally find an email or contact form on the website, and IME they are quite open to talking about what they would like to see. If that comes back positively, then gauge whether the increase in value is significant enough to justify the time, stress and money you would be taking on, and whether your DM is realistically up to this.

It's up to you. Sell without planning permission. Or apply yourself and sell with.

To get planning you'd need to speak to your local planning service at your council. It can take a long time. Planning permission for 1 house took a year when we did it. Next door is looking for planning for 5 homes and it's been 18 months, a huge amount of objections and not even off the starting block.

There are a number of different fees which will vary depending on the council. Possibly a few thousand.

You'd also need an architect to do the plans. We've paid maybe 2k for this so I'm guessing the cost will be a lot higher for a bigger development.

You've got to consider whether the area is somewhere that developers will want to buy and sell in.

Not an estate agent - a chartered surveyor.

They’ll certainly be able because give you an opinion whether it will be simplest to sell subject to planning, or unconditionally with PP for development. The two options shouldn’t see much difference in value.

While your solicitor can protect your best interests legally, they can’t give you commercial guidance and look at the whole thing in the round - a chartrered surveyor can.

What region are you in? i.e. west mids, South east, Wales?

I have a friend going though this - to get planning , and shes nowhere near getting planning - this is only to be able to submit planning - its so far taken her 3 years so far and A LOT of money ( about £100k so far) shes had to do for example newt counts , bat counts etc that cost £10's of thousands.

There are companies that will sell on your behalf for about 30% of the value.

Timing is the thing that will decide whether you want to sell subject to planning, or unconditionally. If you’re happy to wait, then the former will secure you a higher price usually (without you having to do anything other than instruct a surveyor to market the thing and find you a buyer).

If this legacy is being left to several individuals e.g. you, brothers, sisters, grandkids my caution is that usually one person will be “put upon” to do most the work while the others reap the benefit. No matter how happily you set out on the path, by then end there is often ill feeling (at best). You often see threads where family members benefitting from someone’s hard work are not only ungrateful, but critical.

Do. As. Little. As. Possible.

I think you mean 3% Eve?

Another idea for you! If your mum would like to know the “outcome” for the site and get it decided now rather than after (... I know this is quite a sad thing to discuss), ask your surveyor if there would be enough demand in the market to sell an “option” on the site. At only 10 houses, it may be too small, unless part of a larger strategic site, but this is where a developer pays a (smallish) lump sum or an annual fee to basically secure a right of first refusal to be triggered by an event, or for a set period of time.

@boblemon - no 30% - but this is for more than just selling it, this is for consultancy companies that will manage the sale, obtain the planning, get the land added to the regional strategy , mange all the assessments etc.

Thanks everyone.

It's a 0.4 hectare plot. I believe the housing density on the are is around 40 per hectare.

It's a corner plot on a small private estate in the north east.
It attracts a lot of attention from people who see it ( not developers) - all saying will she sell them a plot to build a house- as it's a sought after area of the town. I think it would be snapped up by a builder.

There is a new development being built at the back of the plot, so I don't think PP would be too difficult - there were numerous objections to the large development on ecology grounds but it's been granted.
I suppose it might be worth approaching that developer when the time comes?

My understanding from reading a bit online is that a developer has more chances of getting PP than an individual owner as they know the ropes.

Would you agree?

I don't want to invest money in having plans drawn up if a developer would come along and want to do something different. I'm not an expert on this.

A really basic question then- when I inherit it, what is the first step- sell through and E Agent, or ask surveyors to look at it?

I think you are correct in that the developer has more chance as they know what needs to be done and have resources in place to do this. ...but you wont get as much, though you will have a lot less stress than trying to do it yourself.

Speak to a planning consultant. They are experts in obtaining planning consent for a specific site. A site with consent is almost always worth more than one without.

You can then speak to a local estate agent about marketing the site to developers in order to obtain the best price.

Sorry to sound so ignorant on this! There is obviously a lot of potential money involved and my parents always wanted us to do as well as we could out of it. I'm pretty savvy with a lot of stuff but not this.

Is a planning consultant the same as someone you would find at a chartered surveyors? Or do you mean an independent planning consultant like a private town and country planning practice?

For example, these people

www.bradleyhall.co.uk/land-and-development/

Their website looks alright, actually.

Tip - you need the commercial department, rather than residential. Sorry if you already know that, it’s just not the most intuitive thing to figure out.

Ask a couple to come out to see the site and your mum? If she’s up for that. Maybe also Lofthouse, Naylors or similar? Good to speak to at least a couple before deciding anyone to go with. They’ll probably (if they’re any good) be able to chat with you and shed a bit more light on the process. Maybe even have some existing clients they think of straight away to introduce you to. Or suggest planning consultants if you want to go down that route straightaway. I’d expect them to come out, meet you and “pitch” for free. They might want a fee if you’d like a marketing report done which will set out something on paper your family could consider more.

Thank you!
No I didn't know it was 'commercial' - was split between the two.

Thanks so much.

Obviously nothing is going to happen while mum is alive but there is a lot to be said for getting our ducks in a row. I live along way from her, and although my sibling is closer, I tend to be the more proactive one.

As all PP posters have said, that ou can either sell without PP at a lower value, or get some form of planning and sell for a higher value.

First of all speak to a land surveyor, they will have an idea of the cost of land, potential etc, and give you the best ideas for the plot. If you get the plot valued now without PP you will know where you stand in terms of value.

If you want to proceed with planning, get in touch with a Architect. If you think it will be complex, challenging seek advice from a planning consultant. Most developers use planning consultants, to find poop holes and fight their corner. They will act as your agent, or to reduce costs find an Architect who has a good relationship with the Local Authority, and has a history of obtaining planning approval for similar sites.

You could either apply for full planning permission or outline planning permission. IMO I would only apply for outline, with all matters reserved except siting, access. This gives you an approval, and increases the value of the land. However the design, style, scale of the properties is then decided by the Purchaser and approved through a discharge of reserved matters application. This is less “work” for you, and doesn’t restrict the site which is key to a developer. (They can use their style of house types etc)

Bare in mind you may need other consultants for the pre-application stage, but these should be arranged by your Architect who would give you an idea of costs and obtain quotations.

These could include; tooographic survey, ecology survey, highways consultant.

Outline permission is valid for 3 years from the date of approval.

The only thing I would say is that if you apply for planning permission and the application is refused, this may decrease the value and desire to the developer. Unless it is refuse on grounds they think could be overturned.

The other option would be to have a pre-application meeting with the planning department. You may have to pay for this service. But the information you show / discuss is not made public. This way you could gauge the Councils reaction to a development on the land, and potential be aware of any hurdles you could face.

Thanks @Pokerface81

One query I have is this- don't know if you know?

In terms of inheritance tax and probate, I think we will be under the threshold even including the land with outline PP.

However, I have read that with probate the potential of land for development is used, even if there is no formal planning permission /outline permission in place.

If this is the case (and this is where I need to talk to a solicitor) I would have a case surely for selling to a developer for the potential value which would be the same as the actual value?

I don't think- could be wrong- there will be an issue with PP because the plot is more or less landlocked. Any spare land around it has been built on over the years since my mum's house was built. Hers is the last remaining space available and is actually overlooked by other small developments built more recently.

They had an EA round some years ago and he gave a figure per plot - obviously he was guessing but it gives me a rough idea.

My aim- as is everyone's - is to keep as much money from it for the family rather than large %s to EAs and developers.

I don’t know about the legal aspects, and the probate etc, sorry.

I have just completed a similar development. It was in a built up area, large rear garden, which had potential for 6 dwelling + retaining the existing. The Clients dwelling with large garden was valued at ££400-450k (it needed work).

OUTPP was applied for, and surprisingly got quite a number of objections. This was because people felt there was “too much development” they would be overlooked, over shadowed. We had all matters reserved except siting and access. It was approved at planning committee.

The development sold with 4 weeks of the approval being granted, for the value of the property (£350k), plus £110k per plot. This is now being split between her DC.

Thanks so much.

The house will probably be demolished and that would sort out the access. It would also increase the area to build on.

In the past- a few years ago- we'd been quoted a rough figure of £60K a plot. This was 1 agent who I think my dad may have got round at the time.

I am looking online at the moment at land/plots for sale in their area and some is less than that, others are much more. It is a very desirable area.

I suspect there could be objections but the surrounding houses who it would impact on- roughly 5 - are bugalows, so if the development was too, that should be okay- no one would be overlooked.

Are you based in the north and do you know the company I linked to?

I’m based on the NW, close to their ormskirk office. I’ve never had dealings with them.

Look for local land surveyors and architects and some may offer an informal chat. Most should give you impartial advice, on their thoughts on proceeding and costs. Speak to a few and gauge the costs etc.

Bungalows are at a “premium” as most developers don’t build them, due to the footprint / costs / maximising space and plot potential. But there is a need for them in the UK, so some councils have a requirement for bungalows on developments.

Also there will be a threshold for affordable housing, so a development on (x) amount will require a % of affordable. Which can decrease plot value. This should be indicated in the Local Plan or relevant planning policies.

Good Luck.

You should look at the local plan. This identifies plots for development. Is this one of them? If not, talk to a planning consultant. It may be that it won’t be easy to get pp. Few developers build bungalows.

Also if you get £600k you are over the inheritance tax threshold. If the plot has pp, a judgement will be taken on value for probate and tax.

It could be that the highways authority don’t like the extra traffic and your new road proposal. You will need a highways engineer to advise on this. No neighbour will relish more traffic! They will object!

Good luck. Lots to think about.