What should landowners consider when making land available for development?

The Savills Blog

What should landowners consider when making land available for development?

The government has made plain that it sees housebuilding as a priority for the UK – both as a way to grow the economy and to meet the need for new homes.

In England the updated National Planning Policy Framework (NPPF) aims to clear some of the planning backlog and encourage both residential and commercial development, setting mandatory housing targets and defining new ‘golden rules’ among other measures.

Savills own research has shown appetite for land remains robust, with particular demand for strategic sites to fill long-term pipelines and a notable shift in buyer behaviour that has seen some parties keen to secure a position on grey belt sites and others focused on areas with higher housing targets.

This presents an opportunity for landowners that have sites identified as acceptable for development – for example those that lie within the development boundaries of any Local Plan.

However, if you are considering a land sale, there are some key points to take into account:

Register the land

Unregistered land is more susceptible to adverse possession than registered land. First registrations usually take between six and 12 months, with costs calculated on an increasing scale depending on the size of the land in question.

The more complicated the case the longer the Land Registry requires to process it, although in some instances urgent applications can be fast tracked through an ‘expedite request’.

To ensure any potential sale runs as smoothly as possible, check your paperwork, speak to a solicitor and have land recorded with the Land Registry as soon as possible. 

Vacant possession

Ahead of any sale being completed the land in question must be unoccupied and clear of all chattels. The ability to ensure vacant possession is therefore an important consideration.  

The landowner should make any tenants occupying the land aware of their intention at the earliest opportunity – for example if the land is let under an agricultural tenancy agreement (such as a Farm Business Tenancy or Agricultural Holdings Act tenancy) or if it is let for commercial use. 

An advisor will typically carry out negotiations on the landowners’ behalf, with an agreement known as an Option to Surrender often the preferred method. This arrangement between landowner and tenant sets out various details including when the tenancy will end and any agreed compensation for the tenant. 

Timing

If a tenancy has been agreed on the land – or a short-term tenancy has been arranged until the land is sold – then it is important to consider the following: 

  • Would a developer who promotes the land be able to carry out tests, surveys, measurements, landscaping, archaeological investigations and other activities in relation to the planning process? 
  • Would any developer have the ability to gain access to the land and start construction after gaining satisfactory planning permission?
  • If there is no contractual entitlement to bring a tenancy to an end, the landlord and tenant can often negotiate a Deed of Surrender. This can be beneficial for both parties without the need to enter into protracted disputes.
Ownership structure

It is important for landowners to consider the best structure for owning their land to ensure the most appropriate tax rate is paid on the realisation of any future proceeds of sale.  

There are various avenues available, such as setting up trusts, partnerships or companies, but it is essential to take specialist advice at an early stage.

Trespass 

Development land can be vulnerable to trespass. This can range from a group of people moving onto the land for a short period, to long-term trespass by an adjoining owner. It is therefore important that land is managed and secured correctly, otherwise it can lead to extra costs and sometimes end in court proceedings. Depending on the site, measures could include something as simple as putting up a fence, to employing security staff and undertaking regular inspections. 

 

The government’s commitment to increasing housing delivery means there could be opportunities for landowners who want to release a site for development. To ensure the process runs as smoothly as possible, be well prepared and seek professional advice from a trusted agent as early as possible.

Further information

Contact William Newton or Sam Dillon

 

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