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Mark Withers | 30th June 2017

Development opportunities for landowners


Mark Withers | 30th June 2017

Development opportunities for landowners

This blog was co-written with Peter Kershaw

The planning landscape has undergone something of a revolution since the creation by central government of a requirement for local authorities to have 5 year housing land supply projections.

Many local authorities had, and continue to have, a shortfall in their housing supply. This shortage has led to an increase (some might say an explosion) in speculative planning applications from hopeful owners of land (which previously had little or no prospect of being developed) trying to obtain planning permission for housing and mixed use schemes.

Even in the opportunistic world in which we now find ourselves, the process of obtaining a planning permission to develop land which isn’t allocated for development can be protracted and complicated. Often landowners will start the process themselves, by notifying the local authority of the availability of their land for development. That notification may result in the property being included in the local authority’s strategic housing land availability assessment (often referred to as a SHLAA) before pursuing an outline or detailed planning permission.

Landowners are frequently approached (or approach) developers with a view to the developer pursuing the planning process and unlocking the development potential (and value) of their land. Option agreements are often the vehicle of choice for developers (providing the developer an opportunity to purchase if they wish, but no obligation to do so). Promotion agreements are also used and cater for the situation where a third party promotes a site and if planning is obtained, the site is then marketed and sold with the sale proceeds being distributed in agreed percentages.

The involvement of the right developer will often give focus to the planning process (it is after all, what developers often do best). This will however mean the terms on which the property is to be disposed of (if planning is obtained) need to be agreed and matters such as price (whether fixed, indexed or based on the ultimate market value) and overage (an uplift payable post completion in specified circumstances) need to be considered at an early stage before the principle (let alone the extent) of any development has been established.

The process of promoting and selling land can often be drawn out and is invariably involved. It is essential that fundamental points both of principle and detail are established and understood from the outset.

If you wish to discuss any of the property issues raised in this blog please contact me. Peter Kershaw in our planning team will be happy to discuss any planning queries. Click here to see a full list of our planning services.

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