Land Promotion is one of those buzz words you hear thrown around a lot with land, planning and development, especially as a landowner, so what exactly is it and how does it work?

In very high-level terms, land promotion involves a developer or specialist land promoter securing planning permission on a piece of land at their cost and risk with the eventual sale of the land to a developer for the maximum value achievable. This is done under a land promotion agreement.

The developer or land promoter would typically promote the site through the planning system using their own resources, expertise and funds to secure planning on the site and package up the sale to achieve the maximum value for the site. The cost of planning can regularly total £50k-£100k depending on the size of the proposed scheme if the landowner wanted to secure planning themselves whilst taking on the risk associated with planning, especially without a trusted professional team to enable the best and thus most profitable consent for the site and likelihood of actually achieving planning on the site.

Getting planning permission is only half of it though. Once the site has been consented, the next step is to sell the land for the best possible price. Developers are usually willing to pay more for the site as there is planning already in place and thus significantly reducing the risk to them.

The land would be sold on the open market with the benefit of planning for the best possible price. Instead of agreeing a pre agreed price for the site like a developer might try under an option agreement, the value of the land is determined from market exposure and developer appetite for the site. The landowner and developer/promoter work collaboratively together whilst allowing the landowner to retain control and use over the site at the planning stage. The developer of promoter would receive a % of end sale value, typically 20% of the sale value, after all associated costs of getting planning have been recouped.

The land is packaged up in the most attractive method and offered to the open market with a proper marketing strategy and competitive bidding, meaning you know it has been market tested to achieve the best possible price. A cap would be put on the promoter’s costs for getting planning permission, so everything is fully transparent from the outset.

The big difference with this approach to an option agreement is both the landowners and promoters’ objectives are aligned from the start to achieve the highest value for the land and thus both working from the same side to sell the land for the maximum value.

If planning is not consented, then the developer or promoter would incur all the costs. It won’t cost the landowner anything and so there is very little, if any, risk for undertaking a land promotion agreement.

If you are a landowner and would like to know more about how Marches Homes can achieve the best possible value for your land at no risk or cost to you, then please get in touch with our land director Miles today and a free no obligation chat about how best to take your land forward.

Get in touch now:

Miles Pattison-Appleton
Land Director
miles@marchehomes.co.uk
07772814468