Maximising profit from sale of valuable land

diabhal

Hi all,

In the next year or so my elderly parents will be selling their house and the land around it. It's in a very in-demand area with a lot of developers keen to capitalise on the high prices (think along the lines of Sandbanks). It will undoubtedly attract developer interest however I'm nervous of just trusting the local estate agent to deal with it all. My parents have unfortunately been taken for a ride a few times with past property sales and they will rely on this sale to fund the rest of their lives.

So I'd like to know if there is anything they can do in order to maximise the offers they get. I've looked online and have seen various sites like uklanddirectory.org.uk and building-plot.org.uk where you can advertise your land. Would it be a good idea to use these? Is there a particular site they should use?

Also is there anything they should be doing to facilitate higher bids - like putting in requests for planning permission for extra dwellings etc? Or thinking about any sort of convenants to put on the land?

And finally are there any issues with capital gains they should also be aware of?

Thanks for all your help!

fluffymuffy

You could go for Outline Planning Permission so that you know what can be built in terms of numbers and density.

RAS

We knew we would be selling a house worth £X (plus of minus 10%), when the opportunity rose to make a joint planning application with next door.

I got a copy of the planning application for the development the other side of the street and put in on for the mirror image. Cost £225 plus about £17.50 for the maps.

Got PL for two houses and sold the plot first. Then the house. That solves the CGT issues. Raised 179% of the expected price.

So check out developments in the area, use them to make an outline application and sell before they sell the house. Put up a fence so the house buyers do not mourn what they cannot have.

Fuzzyness

dont use one of those sites that you just used. if you want to sell land best to use a qualified chartered surveyor who has a specialism in land sales. they will be able to market your site to the volume house builders rather than the local builders. using an agent that you employ should also help ensure that they represent your best interests. you will have to pay them either a percentage of the sale of the land or agree a fixed fee. finally you will also need to get a good solicitor who is clued up in land transactions. your local conveyancing solicitor will not be up to the job.

in terms of how to go about it, you have three options.

1) apply for outline planning permission yourself and then sell the site with the benefit of planning permission. will cost you more but allows you to dictate the value as you'll know how many houses you can get on there. if you do this route put an overage clause on the sale to say that if the developer gets any more houses on than you have permission for then you get 50% of the uplift for example.

2) grant an option to buy the land subject to an agreed price, once planning permission is granted. good in that someone will pay you an option fee up front but bad in that once permission is granted they are not legally obliged to buy the land if they dont like the terms set out in the option.

or 3) do a subject to planning deal i.e. once a developer gets permission for at least 10 dwellings (for example) he will pay you X pounds. its a contract so the developer will have to buy the site if planning permission is granted.

If i were you i'd go for the last one.

you'll need to find out what your site could take in terms of the number of houses and then get these valued by a surveyor/agent to help inform what the suggested land value is and consequently waht you shoudl be looking to sell the plot for.

Hope thats a good starter for 10.

diabhal

Thanks guys. This is all amazing advice!

Ras - well done you! That sounds like a brilliant outcome. In our case the house isn't on a street as such, and the houses in the area are completely individual, so there's not a development we can directly copy. Great tip on the CGT!

Fuzziness - would you recommend selling the house first and then the land later to avoid CGT? Would it be possible to do this and sell to the same developer just at different intervals? (I think a developer would want the whole lot for maximum freedom). I'm pretty sure the house would be flattened straight away by any developer to make way for something more in keeping with current trend in glass and steel monstrosities!

Fuzzyness

sorry cant advise on CGT implications. if you're going to sell to a developer you'll have to drop any sentimental attachment to the house. they will drop it if given the chance. there may be other tax reasons for not doing it but i dont know what those might be. if it were me developing your plot i'd want it cleared so that i could fit as many new houses back on it.

diabhal

Yes, I know they would flatten the house. I mentioned it because the same developer would definitely want both the house and the land to have as big a plot as possible to build on. And I imagine this would mean it would be difficult to dodge CGT if the method of doing that is to sell to different people or at different times.

GDB2222

My inclination would be to apply for outline PP yourselves. The less risk for the developers, the more they will pay. They will probably apply for their own PP anyway, but it gives them a baseline.

googler

Fuzzyness wrote: »

dont use one of those sites that you just used. if you want to sell land best to use a qualified chartered surveyor who has a specialism in land sales. they will be able to market your site to the volume house builders rather than the local builders.

Seconded ....