I get asked regularly to value land and derelict buildings in Liverpool and the greater Merseyside area. The main question I’m asked: How much is my land worth to a developer and who will be the best buyer for your land?
Ultimately, you need to see the balance between the speed of the sale and the price or cost to you of a rushed sale as everyone will have a different criteria. I believe the more time you spend researching your own due diligence in terms of your selling options – the higher the price you’ll receive in terms of extracting the maximum value. Sites with Full Planning Permission take time to bring the market, but these sites will always have the highest sales value.
When you market your land, then expect interest from local builders and larger Nationwide Builders, If the site is complicated and is likely to be very challenging to secure Planning Permission, then you may decide to sell your land via an Options Agreement. The main challenges of option agreements for sellers are, there is no guarantee of sale; seeing as the buyer only has the option to cancel the sale.
What are the main type of land agreement sale types:
Option Agreement – very common, although no guaranteed of a sale.
Land Promotion Agreement – often used for larger high-risk planning-gain sites.
Conditional Purchase – simpler than any of the above, and our preferred method.
Hybrid Agreements – they are a mix of option and promotion agreements.
Overage Agreements– often used my Local Authorities as an “Anti-Embarrassment” clause.
Unconditional Purchase – if the site is in a great location with considerable interest from buyers.
Pre-emption Agreement – a right of pre-emption is a right of first refusal.
Sell it on a “subject to planning” – usually via a Conditional Contract
Firstly, I look at the best planning option in terms of generating the highest possible GVD. Ultimately, this often leads to building apartments as the more dwellings on any given plot of land, the better in terms of extracting the value from the site. Apartments also has a higher per sq ft./meter selling price than an equivalent single plot house for example.
The Liverpool property market is also well-supplied with apartments, so the site location really matters as many sites are unviable unless they are sold off-plan to overseas investors. This means there is limited demand for owner-occupiers or local people to buy the apartments in your development.
The first thing is working out the development land options; as a higher development potential; the more the land or property is likely to increase in value. I look an any plot in terms of trying to work out how may units am I likely to secure as regards planning permission. However, there are other options with development sites where there may be a mix of commercial and residential elements to the site.
Top 8 tips for selling land:
Attend your local Planning Committee Meetings for a fast education regarding planning.
Discuss the planning options with an experienced Planning Consultant.
Consider if a “Pre-App” meeting with your local Council is the appropriate strategy.
Instruct your planning consultant to maximise the development potential.
Instruct your architect to maximise the development with apartments.
If you are keeping the properties, then design a higher specification and “future-proof”.
Clear the site from any issues (like contamination) which may affect the “salability” of the site.
Talk to local Commercial and Residential Estate Agents to get a feel for local demand.
Often, if it is straightforward to secure planning, then the value will be higher as demand will be high from buyers, however, If the land is a bigger challenge to bring through the planning system, then this reflects a higher risk for potential buyers. High-risk longer term strategic plots of land are often sold via a Land Promotion Agreements – where both parties work together over a longer period.
A Land Promoter will aim to secure full Planning Permission on behalf of you – the site owner. The promoter will pay all planning costs and offer their planning strategy and expertise entirely at their own risk – if they don’t secure planning, then the owner won’t be out of pocket, but also as a site owner you will have gained a lot of “insider insights” information regarding the planning system.
We Buy Any House Liverpool is a land promoter and highly experienced Property Developer with an established track record over 33 years of maximising land values.