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What are the Pitfalls of Selling Land to Developers?

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Do you have vacant land that you wish to sell online to a property developer?  It is a great way to sell unwanted land and release money.  Learn how you can sell any property, including land.

Selling land with planning permission is the ideal scenario; however, the professional fees for an Architect, planning consultant, various reports and council planning fees can be very expensive.

You may wish to sell land, retain mineral rights, or sell land to a property developer unconditionally.  In this guide, we will cover how to sell land quickly with potential for development and how to avoid the pitfalls of selling land to a developer.

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Is it a good time to sell land in the UK?

It is a great time to sell the land now, given property prices have increased so much.  Historically, February to June is a good time to sell land. 

The second-best time to sell is between mid-September to October.  July and August are quiet months due to land developers being on holiday.

Is it easy to sell land?

There’s never been an easier time to sell land because of a housing crisis.  If you have realistic expectations of the price you are looking to achieve, now would be a good time to sell.  Whether you have a large garden plot, own farmland, bought land as an investment or inherited land, you will be pleased to know that the demand remains high.

Selling land privately to Property Saviour means a hassle-free sale.

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Gaining planning permission can easily run into a six figure sum on a large site.

Does my land have development potential?

You must check how your land is identified on local planning policy.  These plans are the basis for determining the planning potential of the land.  If your land is identified as a ‘green belt’, the chances of getting planning permission are slim.  ‘Brown-field’ land sites such as car parks, disused petrol stations and abandoned factories have a greater chance of gaining planning permission. 

Please note that some councils’ local planning policy doesn’t exist or could be ten years out of date.  Does your land have restrictions such as a right of way, boundary problems, unregistered land or is potentially contaminated?

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What can you build under permitted development?

Permitted development right allows you to extend the house subject to certain restrictions and development of disused buildings such as offices into residential flats.  You will still need to apply for planning permission.

How do I sell my plot of land in UK?

You can choose to sell your plot of land using one of these options:

  • selling it unconditionally without planning permission.
  • selling it subject to planning permission and
  • selling it with planning permission.
Sell Land Quickly With or Without Planning Consent
An acre of land in Home Counties can fetch up to £500,000 or more with planning permission.

How much is an acre of land worth in UK in 2024?

An acre of greenbelt land in Yorkshire could sell for as much as £6,000 and possibly a little more if a neighbour with farm next door is buying it.  An acre of land in Home Counties can fetch up to £500,000 or more with planning permission.

How do you price land to sell?

One way to price land is to calculate gross development value.  This is the value of properties once built minus the cost of build, finance cost, professional fees and land cost, leaving profit.

In percentage terms, a developer aims for a gross profit before tax of 20%, allowing 15% for the cost of finance, 5% for professional fees, 10% contingency and 35% for the build cost.

Land values vary depending on the area, whether any restrictive covenants are in place, and whether it comes with or without planning permission.

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What are pitfalls for selling land to developers?

A major disadvantage of selling land to a developer is that they will deduct the cost of obtaining planning permission and their time from their offer to you.  There are several other factors to consider within this guide.

Selling land for development is a risky game.  Developers can be hard-nosed business people, and if you are not careful, you could end up tied into a very lengthy option agreement with no prospect of a sale if the developer ‘banks’ your land.  For a developer, a brownfield site is far easier to get planning permission.

Our tips for selling land for development will be a helpful guide when selling your land.

Your agenda may not be a priority for your developer – this will affect your negotiations!

You will want as much as you possibly can get.  But developers will play a long game.  The land you want to sell will form part of a small scheme within the developers’ land bank.  If you sign the wrong deal, you will find that the developer may not apply for planning permission for some time.  This is because the developer will have other local sites that are much easier to gain planning permission for.

Be prepared for price negotiations – do not let the developer dictate terms!

Following planning permission, the developer would want to buy your land.  They will issue you with a “Price Notice”.  The final price a developer would offer you will depend on:

  1. The actual size of the site, gross and net size.  The “net” size is where the developer is allowed to build houses and will often be much smaller than the “gross” size.  The developer will tell you that this area cannot be developed because it is required for access to the site or community facilities, i.e., a children’s play area.
  2. Up to 50% of land may be deemed “undevelopable”, so the developer would want 50% off the agreed price!
  3. Watch out for the “headline price”.  Once planning permission has been granted in your locality, this is the gross value figure per acre for the land.  It is very rare for a developer to offer you 100% of the land headline price.  Developers generally make deductions from the headline price to cover their costs, such as:
  4. ‘Extraordinary’ costs include sites inhabited by rare animals such as newts.  Developers will be required to provide a new habitat for newts and may even require ‘newt crossings’ to encourage them to move into their new home.
  5. Finally, they will consider the type of development that already has planning consent granted.  The value of land intended for sizeable plots for larger detached properties will be less than for a site with a larger number of smaller houses, easier to market and quicker to sell.
Cottage with miles of rural land
Sale of land can for development or otherwise can trigger a Capital Gains Tax (CGT)

Do I have to pay tax if I sell my land?

Sale of land can for development or otherwise can trigger a Capital Gains Tax (CGT).  This is calculated by sale price minus purchase cost and any qualifying expenses.  A good accountant should be able to help.

Do I need an agent to sell land?

You can sell land online privately and therefore, won’t need an estate agent and save on their commission fees.

How can I sell my land quickly?

Fastest way of selling your land is to a cash land buyer like Property Saviour.

auction hammer

Property Saviour Price Promise

  • The price we’ll offer is the price that you will receive with no hidden deductions.
  • Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
  • These valuations or surveys result in delays and price reductions later on.
  • We are cash buyers.  There are no surveys.
  • We always provide proof of funds with every formal offer issued.

We'll Pay £1,500 Towards Your Legal Fees

  • No long exclusivity agreement to sign because we are the buyers.
  • You are welcome to use your own solicitor. 
  • If you don’t have one, we can ask our solicitors for recommendations.
  • We share our solicitor’s details and issue a Memorandum of Sale. 

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  • Our approach is transparent and ethical, which is why sellers trust us.
  • 100% Discretion guaranteed. 
  • If you have another buyer, you can put us in a contracts race to see who completes first.
  • Complete in 10 days or at a timescale that works for you.  You are in control.

How much do developers pay for land in UK?

It depends on land, its location and desirability generally speaking a developer will pay between 20-25% of gross development value.

Do developers buy land without planning permission?

Yes we buy land without planning and with planning permission for cash.

sell house to a developer
As a rough guide, land without planning permission is worth around 10% of gross development value. 

How much is a plot of land worth without planning permission?

As a rough guide, land without planning permission is worth around 10% of gross development value.  This is because planning permission is not guaranteed and that’s the risk the developer is willing to take to buy land as it is.

Will a developer buy my house?

As a property developer, we’d love to buy your house if it has large garden, annexe or outbuildings.

How can I sell my land fast?

Selling your land fast for cash couldn’t be any simpler with Property Saviour.

We are specialist land buyers looking to buy parcels of land across England & Wales. We buy with cash and can complete quickly. We will also apply for planning permission – and keep you posted throughout the process!

Selling land for development purposes can be rewarding.  However, be careful when dealing with developers.  We are looking for plots of land to develop, and if you are looking for a fair price, we may just be able to offer you that.  We will not offer you a “headline price” and then make deductions or reduce the price by 50% once planning permission has been granted.

We have seen many landowners being treated unfairly by the developers.  Do not be one of them.  Call us on 0113 320 6700 or request a call back to see how we can help you sell your land.

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