Is Land Promotion Better Than Selling Land Now?

Written by the Revive Estates Group team — independent land development consultants helping landowners across the UK understand and unlock the development potential of their land, property and buildings.

Is Land Promotion Better Than Selling Land Now?

There is no universal answer.

For a landowner with genuine development potential, promoting land through the planning system can potentially increase its value significantly compared with selling the land based only on its existing use.

But promotion is not free of risk.

It can take years, involve professional and planning costs, require ongoing engagement with the planning system and still result in planning permission being refused or the development opportunity being smaller than expected.

Selling the land now provides a different proposition: certainty, speed and a known outcome.

The decision therefore comes down to balancing:

• potential future value;
• planning prospects;
• time;
• risk;
• cost;
• your personal circumstances; and
• how much uncertainty you are prepared to accept.

What Is Land Promotion?

Land promotion is a strategy where a landowner works with a land promoter to pursue planning permission or a valuable planning allocation for the land.

The promoter typically helps progress the planning opportunity, which can involve:

• assessing the site’s development potential;
• developing a planning strategy;
• engaging with the local planning authority;
• coordinating planning and technical consultants;
• promoting the land through the Local Plan process where appropriate;
• preparing and progressing planning applications;
• addressing planning objections and technical issues; and
• ultimately helping bring the land to the market when its planning position has been improved.

The precise arrangements depend on the promotion agreement.

In many cases, the promoter receives an agreed percentage of the eventual sale proceeds if the planning strategy succeeds.

Land promotion is therefore fundamentally about trying to increase the value of land by improving its planning prospects.

What Does Selling the Land Now Mean?

Selling the land now means accepting the value the market is currently prepared to pay for the site’s existing use and planning position.

That might be an agricultural, equestrian, residential, commercial or other existing-use value.

Depending on the circumstances, a purchaser may also pay something for development or “hope” value where there is a possibility of future planning permission.

However, the purchaser is taking on the future planning risk.

This is important because a developer or investor buying land without planning permission will generally factor the cost, risk and time of pursuing that planning opportunity into the price they are prepared to pay.

Why Might a Landowner Sell Now?

Selling now can be attractive for several reasons.

• Certainty: You know what you are receiving rather than waiting for an uncertain planning outcome.
• Speed: A sale can potentially complete much sooner than a planning-led strategy.
• No planning risk: The purchaser takes on the future development risk.
• No promotion costs: You are not funding or sharing the costs associated with pursuing planning.
• No long-term commitment: Once the transaction completes, the planning process is no longer your responsibility.
• Personal circumstances: You may need or prefer to release capital now.

For some landowners, those benefits are worth more than the possibility of achieving a higher future price.

Why Might a Landowner Promote the Land Instead?

The main reason is the possibility of achieving a significantly higher value by improving the planning position.

For example, land that currently has mainly agricultural value could potentially become significantly more valuable if it obtains planning permission for residential development.

The same principle can apply to other types of land where a change in planning use creates a substantially different development proposition.

Promotion allows the landowner to retain an interest in that potential uplift rather than selling the land before the planning opportunity has been pursued.

However, the potential uplift should always be considered alongside the costs and risks of achieving it.

Does Land Promotion Guarantee a Higher Price?

No.

This is one of the most important points for landowners to understand.

Land promotion is a strategy for pursuing planning potential. It is not a guarantee that planning permission will be secured or that the land will ultimately sell for a particular amount.

A planning application can be refused.

A Local Plan allocation may not happen.

The number of homes may be lower than expected.

Technical constraints may reduce the developable area.

Market conditions may change during the process.

Infrastructure or affordable housing requirements may affect the economics.

The eventual sale price therefore depends on what is actually achieved.

How Does the Risk Compare?

The simplest way to look at the decision is that selling now transfers much of the future planning risk to the purchaser, while promotion means the landowner continues to have an interest in that risk and potential reward.

Factor	Sell Now	Promote Land
Speed	Generally faster	Usually slower
Certainty	Greater once sale agreed	Planning outcome uncertain
Planning risk	Mainly transferred to purchaser	Remains part of the landowner’s strategy
Potential value	Based on current position and buyer risk	Potentially higher if planning succeeds
Costs	Mainly transaction costs	Planning and promotion costs may arise
Landowner involvement	Usually ends after completion	Continues through the promotion strategy

How Much More Could Land Be Worth With Planning?

There is no universal percentage increase.

The difference can vary enormously depending on the location, proposed use, development capacity, planning policy and costs involved.

For example, land capable of supporting a substantial residential development may have a very different value from land capable of accommodating only a small number of dwellings.

Even two sites with the same number of potential homes can have very different values because of:

• local house prices;
• development density;
• affordable housing;
• infrastructure contributions;
• highway requirements;
• abnormal ground conditions;
• ecology;
• drainage;
• landscape requirements;
• planning costs;
• finance and holding costs; and
• market conditions.

This is why it is dangerous to calculate a potential land value simply by multiplying the site area by a headline residential land value per acre.

What Is the Difference Between Hope Value and Development Value?

Hope value is the value a purchaser may attribute to the possibility of a future change in planning use.

Development value is more closely associated with a site where a realistic planning route has been established and development can potentially be delivered.

A landowner selling before planning has been secured may therefore receive some hope value, but the purchaser will normally discount the price to reflect the risk and cost of pursuing the opportunity.

Promoting the land can be a way of attempting to move the site further along that planning journey before selling it.

Our guide explains hope value in more detail:

What Is Hope Value in Land?

How Long Does Land Promotion Take?

There is no fixed timescale.

A straightforward planning application can sometimes progress relatively quickly, while a strategic site requiring Local Plan promotion can take several years.

Timescales can be affected by:

• the council’s Local Plan timetable;
• housing requirements;
• planning policy;
• technical studies;
• infrastructure requirements;
• planning objections;
• appeals;
• changes in national planning policy;
• market conditions; and
• the complexity and scale of the site.

A landowner considering promotion should therefore be comfortable with a strategy that may take significantly longer than an immediate sale.

What Does a Land Promotion Agreement Usually Involve?

A land promotion agreement is a contractual arrangement between the landowner and promoter.

The exact terms vary, but the promoter will generally take responsibility for progressing the planning opportunity in return for an agreed share of the eventual sale proceeds if the strategy succeeds.

The agreement may cover matters such as:

• the length of the agreement;
• the promoter’s responsibilities;
• planning strategy;
• consultant appointments;
• costs;
• marketing the land;
• how the eventual sale is handled;
• the promoter’s fee or percentage;
• minimum sale price provisions; and
• what happens if planning is unsuccessful.

Because the agreement governs a potentially valuable asset for several years, the terms should be understood carefully before signing.

Could You Sell the Land With an Existing Planning Opportunity Instead?

Yes.

Landowners do not necessarily have to choose between an immediate sale and a long-term promotion agreement.

There can be intermediate strategies depending on the circumstances.

For example, a landowner might:

• obtain an initial planning assessment before deciding;
• submit the land to a Call for Sites;
• pursue a planning application;
• market the land with a planning opportunity identified;
• enter into an option or conditional agreement; or
• enter into a promotion agreement.

The appropriate route depends on the strength of the opportunity and the landowner’s objectives.

When Might Selling Now Make More Sense?

Selling now may be more appropriate where:

• you need certainty or capital in the short term;
• the planning prospects are weak;
• the potential uplift is unlikely to justify the additional risk;
• the planning process is likely to be particularly lengthy;
• the site has significant unresolved constraints;
• you do not want a long-term involvement in the planning process; or
• you have received an offer that already reflects meaningful development potential.

In those circumstances, accepting a known value can sometimes be more appropriate than pursuing an uncertain future opportunity.

When Might Land Promotion Make More Sense?

Promotion may be worth considering where:

• the land has credible development potential;
• there is a clear planning opportunity worth pursuing;
• the potential difference between current value and development value is substantial;
• you are prepared to wait for the planning process;
• the site could benefit from a Local Plan allocation;
• there is a realistic route towards planning permission;
• you want to retain an interest in the potential uplift; and
• the economics justify the additional time and risk.

Again, these are indicators rather than guarantees.

What About a Developer’s Offer to Buy the Land?

If a developer has approached you, it is particularly important to understand what they believe your land could ultimately be worth.

A developer may make an offer based on:

• the site’s existing use;
• an element of hope value;
• their own planning assessment;
• anticipated development capacity;
• expected planning costs;
• their required profit margin; and
• the risks they are prepared to take.

The fact that a developer wants the land can therefore be useful evidence that they see potential, but it does not necessarily mean that their first offer represents the full value of the opportunity.

Before accepting an offer, it can be worth understanding the development potential independently.

A Developer Has Approached Me About My Land — What Should I Do?

How Should You Compare the Two Options?

A useful way to approach the decision is to compare the likely outcomes rather than simply asking which option produces the highest theoretical value.

Consider:

• What could the land sell for today?
• What development potential does the site realistically have?
• What could the land potentially be worth if planning succeeds?
• How likely is that planning outcome?
• How long could it take?
• What costs and obligations could arise?
• What happens if planning fails?
• What percentage would a promoter receive?
• What are your personal financial requirements?

This gives a much more realistic basis for comparing selling now with pursuing a planning strategy.

Should You Get a Land Assessment Before Deciding?

For a potentially valuable development site, this can be a sensible first step.

You do not necessarily need to commit immediately to either selling or promoting the land.

An initial assessment can help establish:

• the current planning position;
• potential development uses;
• the likely scale of development;
• key planning constraints;
• the strength of the location;
• potential planning routes;
• whether a Call for Sites or Local Plan opportunity exists;
• whether land promotion could be appropriate; and
• whether selling now may be the more sensible option.

The purpose should be to understand the opportunity before making a major decision about the land.

So, Should You Sell Your Land or Promote It?

There is no answer that applies to every landowner.

If the planning prospects are weak and you value certainty, selling now may be sensible.

If the site has strong development potential and the potential uplift is substantial, promotion may be worth investigating.

If you are unsure, the first step does not have to be either.

Understand the site’s realistic development potential first.

Once you know what the land could potentially achieve, you can make a more informed comparison between taking a known price today and pursuing a potentially higher value in the future.

Frequently Asked Questions

Is land promotion better than selling land now?

It depends on the site and the landowner’s circumstances. Promotion may create the opportunity for a higher future value if planning succeeds, but it involves additional time, risk and uncertainty. Selling now provides greater certainty and a known outcome.

Does land promotion guarantee a higher land value?

No. Land promotion is an attempt to improve the planning position and potentially increase value. Planning permission or a Local Plan allocation is not guaranteed, and the eventual value depends on what can realistically be delivered.

How long does land promotion take?

There is no fixed timescale. Some planning opportunities can progress relatively quickly, while strategic land requiring Local Plan promotion can take several years. The timetable depends on the site, planning authority, planning process and complexity of the opportunity.

What is the difference between selling land and promoting it?

Selling transfers the land to a purchaser at an agreed price, with the purchaser generally taking on the future planning risk. Promotion involves pursuing the land’s planning potential before a future sale, allowing the landowner to retain an interest in the potential uplift but also remain exposed to planning risk and delay.

Can I promote land without selling it immediately?

Yes. Land promotion is generally designed to pursue planning potential while the landowner retains ownership until a future sale, subject to the terms of the promotion agreement.

What percentage does a land promoter take?

There is no universal percentage. The promoter’s fee or share of the sale proceeds is a contractual matter and can vary depending on the site, the work involved and the terms negotiated.

Is land promotion suitable for Green Belt land?

Potentially. Green Belt land can have development opportunities in certain circumstances, particularly where current planning policy provides a potential route. However, Green Belt land carries additional planning considerations and promotion does not guarantee release or planning permission.

Should I accept a developer’s first offer?

Not necessarily. The right decision depends on the offer, the site’s development potential, your circumstances and the terms of the proposed transaction. Understanding the land’s potential before accepting an offer can help you make a more informed decision.

What is hope value?

Hope value is the value attributed to the possibility that land may obtain a more valuable planning use in the future. It is different from the value of land with an established planning permission or a clear development allocation.

If you are weighing up a land sale against pursuing your site’s development potential, contact Revive Estates Group for an initial discussion.