Can I Sell My Land to a Developer? A UK Landowner’s Guide

If you own land, you may have wondered whether you could sell it to a property developer — particularly if you believe it could have potential for housing, commercial development or another use.

The short answer is yes, potentially.

You do not necessarily need planning permission before a developer will be interested in your land. Developers consider sites at many different stages, from land that already has planning permission through to land that may have longer-term development potential.

The more important question is therefore not simply:

Can I sell my land to a developer?

It is also:

What is my land potentially worth, and is selling it now the best option?

Those questions can make a significant difference to the outcome for a landowner.

What Types of Land Do Developers Buy?

Developers are interested in a much wider range of land than many landowners realise.

Depending on its location, planning position and characteristics, potential development opportunities can include:

• Residential development land
• Individual building plots
• Agricultural land adjoining settlements
• Large gardens
• Brownfield and previously developed land
• Redundant commercial buildings
• Former industrial sites
• Existing buildings with conversion potential
• Land with planning permission
• Land without planning permission
• Strategic land
• Land with potential for commercial or alternative uses

A site does not necessarily need to look like an obvious development site to be worth investigating.

For example, a field on the edge of a settlement, a large garden, an underused commercial property or an old agricultural building may have development potential that is not immediately apparent.

This is why understanding the planning position and potential of the land is important before deciding how to sell it.

Do I Need Planning Permission Before Selling to a Developer?

No.

Developers can purchase land without planning permission where they believe there is a realistic opportunity to obtain planning permission or otherwise increase the value of the site.

Land with an existing planning consent will generally have a clearer development proposition. However, land without planning permission may still be valuable if there is a realistic prospect of obtaining consent in the future.

Factors that can influence this include:

• The location of the site
• Local planning policies
• Whether the site is within or adjoining a settlement
• The settlement boundary
• Local housing requirements
• Previous planning applications
• Access
• Highways considerations
• Flood risk
• Ecology
• Landscape constraints
• Availability of utilities
• Surrounding development
• The potential number and type of properties that could be developed

This is why land without planning permission should not automatically be regarded as having little or no development value.

If you are unsure about your site’s prospects, read our guide Is My Land Suitable for Development?.

How Do Developers Decide What My Land Is Worth?

One of the biggest misconceptions among landowners is that there is a simple price per acre for development land.

There isn’t.

A developer will generally look at the potential end value of the completed development and work backwards.

They may consider:

What could potentially be built on the site?

How many properties could be developed?

What could those properties potentially sell for?

They then consider the costs involved in bringing the development forward, including:

• Construction costs
• Professional fees
• Planning costs
• Infrastructure
• Highways works
• Planning obligations
• Finance
• Marketing
• Legal costs
• Contingency
• Developer’s required profit

The amount remaining after these costs can provide an indication of what a developer may be able to pay for the land.

This is commonly referred to as a residual land valuation.

For a more detailed explanation, see How Much Is My Land Worth to a Developer?.

Why Might Two Developers Offer Completely Different Prices?

This can be confusing for landowners.

You may speak to two developers about exactly the same piece of land and receive substantially different offers.

That does not necessarily mean that one developer is wrong.

Different developers may make different assumptions about the site, including:

• The number of properties they could build
• The type and size of properties
• Likely sales values
• Construction costs
• Finance costs
• Planning risk
• Required profit
• The length of time they expect to hold the site
• Their appetite for planning risk
• Their experience of the local market

A developer who already operates in the local area may also have a different view of the opportunity from a developer who is less familiar with the market.

This is one reason why understanding the development potential of your land before accepting an offer can be important.

Should I Accept the First Offer From a Developer?

Not necessarily.

Receiving an offer can be exciting, particularly if you have never previously considered your land to have development value.

However, it is worth stepping back before making a decision.

The highest headline price is not necessarily the best offer either.

You should consider the wider terms of the proposed transaction, including:

• The purchase price
• Whether the offer is unconditional
• Whether it is subject to planning
• The proposed timescale
• Deposit arrangements
• Overages or clawback provisions
• Any conditions attached to the purchase
• Access requirements
• Who is responsible for particular costs
• The developer’s ability to complete the purchase
• The developer’s experience

A lower headline offer with straightforward terms may sometimes be preferable to a higher offer with significant conditions or uncertainty.

You also do not necessarily have to accept the first developer who approaches you.

Depending on the circumstances, there may be an opportunity to introduce the site to other potential developers and compare the level of interest and offers available.

At Revive Estates Group, we can assess the opportunity and, where appropriate, introduce your site to other developers or take the opportunity to market and promote the land ourselves.

This can help create greater competition and give you a better understanding of what the market may be prepared to pay for your land.

The right approach will depend on the individual site, its planning potential and your objectives.

What If a Developer Has Already Approached Me?

If a developer has contacted you directly, you may already have an indication that your land has some potential.

However, an approach from a developer does not necessarily mean that you should immediately accept their proposal.

Before agreeing to anything, it can be sensible to understand:

1. Why are they interested in your land?
2. What do they believe could be developed?
3. How have they arrived at their offer?
4. Is the offer subject to planning?
5. Are there conditions attached?
6. What happens if planning permission is not obtained?
7. Are there overage provisions?
8. How long will the transaction take?
9. Could your land have greater value through an alternative route?

If this is your situation, read A Developer Has Approached Me About My Land — What Should I Do?.

Is Selling My Land Now the Best Option?

This is one of the most important questions a landowner should consider.

Selling your land today may be the right decision.

But in some circumstances, the land could potentially be worth more if its development prospects are explored first.

There are several possible routes.

Sell the Land as It Stands

You may decide to sell the land based on its current planning position and use.

This can provide a relatively straightforward route to a sale, although the price will reflect the risks and potential perceived by the buyer.

Obtain Planning Permission Before Selling

In some circumstances, it may be possible to increase the value of land by obtaining planning permission before selling it.

The potential uplift can be substantial, although planning applications involve costs, time and risk.

Enter Into a Land Promotion Agreement

Under a promotion agreement, a land promoter works with the landowner to seek planning permission.

The promoter generally funds and manages the planning process and, if successful, the land is then marketed for sale.

The intention is usually to create competition between buyers and maximise the value achieved when the land is sold.

Read What Is Land Promotion and Is It Right for Your Land?.

Consider an Option Agreement

An option agreement can give a developer the contractual right to purchase the land, usually subject to agreed terms and within a specified period.

Option agreements can be appropriate in certain circumstances, but the terms need to be carefully considered.

Read What Is an Option Agreement? A Plain-English Guide for Landowners.

You can also read Promotion Agreement vs Option Agreement: Which Is Right for Your Land? for a comparison of the two approaches.

There is no single route that is right for every landowner.

The appropriate strategy depends on the land, its planning prospects, your circumstances and your objectives.

Before You Sell, Understand Your Land’s Potential

Selling land can involve a significant amount of money, so it is worth taking a step back before committing to a particular route.

You may ultimately decide that an immediate sale is the best solution.

Alternatively, you may find that your land warrants further investigation, planning promotion or another development strategy.

The important thing is to make that decision with a clear understanding of the opportunity, rather than simply accepting the first approach or offer you receive.

What Could Make My Land Attractive to a Developer?

Developers will generally be looking for sites where there is a realistic opportunity to create value.

Some of the factors they may consider include:

Location

Location is one of the most important factors.

A site close to an existing settlement, employment, services and transport links may have very different prospects from an isolated rural site.

Planning Policy

The local planning policy position can have a significant impact on development prospects.

A site’s relationship with settlement boundaries, housing allocations, Green Belt and other planning designations may all need to be considered.

Access

A potential development needs suitable access.

Highways constraints can therefore have a significant impact on the number and type of development that may be possible.

Surrounding Development

Existing development around a site can provide important context when assessing potential.

For example, land adjoining an existing built-up area may warrant further investigation even if it does not currently have planning permission.

Constraints

Flood risk, ecology, landscape, heritage, trees, utilities and other constraints can all affect development potential.

Importantly, a constraint does not necessarily mean that development is impossible.

The question is usually how that constraint affects the type, scale and viability of development that might be possible.

How Can I Find Out Whether My Land Has Development Potential?

If you are unsure whether your land could have development potential, the first step is usually to look at the site objectively.

Consider:

• Where is the land?
• What is it currently used for?
• How large is it?
• Is it within or adjoining an existing settlement?
• Is there road access?
• What development surrounds it?
• What does the local planning policy say?
• Has planning permission previously been sought?
• Are there obvious physical or environmental constraints?

However, a quick look at a planning map is only the starting point.

Understanding development potential can involve bringing together planning policy, site characteristics, access, constraints, local development patterns and potential end values.

Can I Sell Agricultural Land to a Developer?

Potentially.

Agricultural land can have development value where its location and planning circumstances provide a realistic prospect of an alternative use.

However, not every field or parcel of agricultural land will have development potential.

Factors such as its relationship with nearby settlements, planning policy, access and environmental constraints can all be important.

If you own agricultural land that adjoins or is close to a built-up area, it may therefore be worth investigating its potential rather than assuming that its value is limited to agricultural use.

Can I Sell Land Without Planning Permission?

Yes.

Land without planning permission can still be attractive to developers if there is a realistic prospect of obtaining consent.

However, the greater the planning uncertainty, the greater the risk for the purchaser — and that risk will normally be reflected in the price they are prepared to pay.

This is why it is important to understand the planning prospects of the land before comparing offers.

Frequently Asked Questions

Can I sell my land to a developer without planning permission?

Yes. Developers can purchase land without planning permission where they believe there is a realistic opportunity to obtain planning permission or otherwise increase the value of the site.

How much will a developer pay for my land?

There is no standard price. The value will depend on factors including the location, planning position, potential development, end values, development costs and the level of risk involved.

For more information, see How Much Is My Land Worth to a Developer?.

Will a developer buy agricultural land?

Potentially. Agricultural land can have development value where its location and planning circumstances provide a realistic prospect of an alternative use. Not all agricultural land will have development potential.

Should I sell my land to the first developer who approaches me?

Not necessarily. Before accepting an offer, it is worth understanding the developer’s proposal, the terms attached to it and whether other options could potentially produce a better outcome.

If a developer has already approached you, read A Developer Has Approached Me About My Land — What Should I Do?.

Can I increase the value of my land before selling it?

Potentially. In some circumstances, planning permission or a planning promotion strategy can increase the value of land. However, this depends entirely on the individual site and the risks and costs involved.

What if I don’t know whether my land has development potential?

That is exactly the sort of question an initial land assessment can help you explore.

Revive Estates Group offers a free initial land assessment to help landowners understand whether their land or property may have development potential and what opportunities could be worth exploring.

Final Thoughts

Yes, you may be able to sell your land to a developer — even if it does not currently have planning permission.

But the more important question is whether selling it now is the best route for you.

Land can have development potential that is not immediately obvious, and different developers may place different values on the same opportunity.

Before accepting an offer, it can therefore be worthwhile understanding the planning position, potential development options and likely value of the land.

If you are considering selling your land to a developer, or simply want to understand whether your land could have development potential, the first step is to find out what opportunities may exist before deciding what to do next.