With a saturated UK housing market, it is hardly surprising that many Britons are turning their attention to buying land. If you are considering buying land for development, self-build or investment purposes then our guide, written for property developers and investors could give you a head start to steer you in the right direction, and help you to avoid some of the pitfalls that beset many an investor.
The trend for buying land is attracting all sorts of people, from first time buyers that cannot get on the property ladder and aren’t afraid to self-build, as well as more astute property investors and developers who are keen to reap the rewards of redeveloping an existing property or build anew.
Who’s Buying Land?
Land purchase is attracting people from many different walks of life – which is hardly surprising given the opportunities that it brings.
Many people see buying land as a modern alternative to investing in traditional property, whereas others simply relish the challenges that it brings.
There are also others who have been successful in climbing the property ladder and now want to build their own unique home which is perfect to their tastes, and is situated in a location of their choice.
Irrespective of reasons or motives, buying land for building or development could be the way forward for many people.
If you are serious about buying land an element of luck is required, as is plenty of time, effort and research into the market for building plots and development land.
It is highly recommended that you spend some time looking at suitable locations, historic land sales, current market rates for land with and without planning permission, and the speed at which it sells.
This level of research will give you some really good background knowledge and plenty of ideas as to what to expect when you come to buy that dream building plot.
If you are serious about buying land for development or investment then you need to have a good, strong foundation if you are to be successful – otherwise your investment plans may crumble.
To help you along your way we suggest that you keep-in-mind four key aspects when evaluating any land buying opportunities:
Preparing your Investment Appraisal
As with any investment, before you jump straight into purchasing your plot of land you need to plan well, budget and ideally create a sound investment appraisal for your property development project that will stand-up to detailed scrutiny, especially if you will be seeking external property finance.
Once you are happy with your investment appraisal and its outcome you should move on by researching the best locations and trying to identify the right plot of land for your needs.
Legal searches, surveys, planning permissions and such like will come further down the line.
Property Development Budgeting
As an essential part of the property development process you need to budget carefully and include for the cost of buying the land, development of the plans and specifications, regulatory approvals, the cost of the build itself, account for any professional fees, and make allowances for sales and marketing costs on completion of the development.
Bear in mind also that if you are looking for plots of land in highly desirable areas you will probably need to pay a premium, and you will also pay more if the land has planning permission already in place.
Are there Different Types of Building Land?
Once you have completed the development budgeting process and you are happy with your figures, you will then need to research what different types of land can do for you and your profitability… Brownfield land and Greenfield land are the most common.
Greenfield land is undeveloped land, such as parks and forests and is, unsurprisingly the most popular type of land to build on.
However, greenfield land can often be difficult to obtain planning permission on so you should always check its planning status with the local planning authority (LPA).
Brownfield land however, is typically land that was once occupied by another building.
In many ways Brownfield land is the safer development option because you know that something was once allowed to be built on there, making your planning application more likely to be granted.
How to Find Suitable Plots & Building Land?
Once you have completed your research and any other investigations, you should then start to register your interest with all the relevant parties which will include local and national estate agents, land agents, land brokers and specialist Internet development land portals such as Land Bank (www.landbank.co.uk).
If you are serious about buying land take a look in the property sections of national and local newspapers, property and lifestyle magazines and surf the net on a daily basis, as new opportunities often arise when you least expect them.
Land buying opportunities can also be found at specialist land and property auctions, via utility companies who often own large land banks, through your own private enquiries and the government and local authorities.
To unearth the best deals and identify the best plots of land it is often necessary to really do your homework and research extensively your preferred locations.
Buying Land with Planning Permission
If you have spotted a plot of land that you are interested in purchasing, before going ahead and buying you should think about planning permission.
It is always a good idea to contact the local planning authority to determine whether or not they will allow you permission to build in the first place – and in the way you want.
However, be careful not to assume that if you purchase land with planning permission attached that you will be able to press ahead and build whatever you want to.
There are likely to be certain restrictions on any building and development works and you should check these details carefully.
Some areas have restrictive covenants which may thwart your long-term objectives.
It is always highly advisable to make sure you know exactly what you are/ are not entitled to do under the planning permission attached to the land.
With planning permission being so vital in terms of your long term strategy, it is important that you develop a good relationship with the planning officers and other officials at your local planning authority.
If the local planners get to know you well and understand more about your dreams and aspirations for the land they are more likely to work with you to make sure that your plans both meet their rules and are as close to what you need.
Try to involve the planning officers in your work from the start and don’t be afraid to ask their advice when coming up with ideas or alternative solutions for the build.
A good working relationship will mean that the job is done quickly, effectively and, more importantly, how you want it.
Do I need a Land Survey?
If you are determined to press ahead with your land buying project should also get the land professionally surveyed.
A qualified land surveyor, usually a member of the Royal Institution of Chartered Surveyors (RICS) should be appointed to help you prepare the plans you’ll undoubtedly need later on.
A qualified land surveyor will tell you if there are any problems with the land and if anything should stand in the way of your proposed development project.
Registering your Interest with the Seller
Once you have got confirmation that there are no problems with the land itself and that planning permission will be granted based on your outline development proposals, you can then go ahead and register your interest with the seller of the land.
The land buying process and ensuing legal stages should not be too complex, either… certainly a lot less complicated than if you were buying or selling property.
We do recommend however that you get good professional advice in the form of an experienced property solicitor, at all stages of the land buying process so as to avoid any unwanted pitfalls.
Property Investment Solutions
As a leading independent property and land investment specialists Investment Property Partners offer expert advice and support to clients across our specialist areas of expertise helping them to achieve their investment objectives.
If you are a property investor searching for commercial property, residential property, land or property development opportunities please contact us today to discuss how Investment Property Partners can help you.
More information about buying land for development… here →
More information about self-building… here →