- King West in London
19th November 2018
- Changes to Minimum Energy Efficiency Standards
19th November 2018
- The Pros and Cons of Option Agreements
22nd October 2018
- Defra’s updated Code of Good Agricultural Practice on protecting water, soil & air.
29th September 2018
- The Code of Good Agricultural Practice on protecting water, soil & air
20th September 2018
22 February 2018
What is Strategic Land?
Strategic land is usually greenfield in nature and located on the edge or close to existing settlements, especially those sustainable towns and villages with good transport links and local facilities. Usually, such land doesn’t have planning permission but has the potential in the medium to long-term, to achieve planning permission.
The work involved in obtaining planning permission is diverse, from extensive public consultation and engagement to a myriad of consultants’ reports covering diverse matters such as topography, landscaping, flora & fauna, archaeology, drainage (both foul and storm water), flood risk, pre-application advice, etc. All these have to be carried out and constraints resolved before a planning application can be submitted. Having submitted the application and negotiated the details with a planning officer, the Section 106 Planning Agreement then has to be negotiated with the affordable housing provision and financial contributions to a range of matters, but usually education, maintenance of open space and play areas, transport plans and even wheelie bins. There is also a Levy to be paid on receipt of planning permission, known as the Community Infrastructure Levy.
All of these costs will adversely affect the value of building land to some extent and in some cases the planning permission obtained at the end of the planning process can turn out to be unviable, especially if there are additional abnormal costs on matters such as foundations, ground conditions, off-site works or having to acquire third-party land.
Once a satisfactory planning permission has been obtained, the land is then sold. If the land was subject to an Option Agreement, the Option holder has the right to buy the land at a price to be calculated or, if it cannot be agreed, by arbitration or by an independent expert.
Alternatively, if the land is covered by a Promotion Agreement, the site is then offered for sale on the open market with planning permission and, once sold, the resultant price is shared between the landowner and Promoter. A typical division would allocate 85-90% of the open market value of the land to the landowner.
It is not surprising that almost all of the strategic land transactions handled by King West over the last few years have been by way of Promotion Agreements, as in our view, there are clear advantages to the landowner when compared to a standard Option Agreement.
Successful promotion of strategic land sites requires tenacity, attention to detail and exceptional project management. King West has extensive knowledge and experience in advisory roles as well as providing a full service to landowners; through acquisition, gaining permissions and development to sale of the residential properties or the land as a whole. The experience of the team covers option agreements, planning and development solutions, advice on the opportunities land provides and collaborations in addition to sales.
If King West can be of assistance to landowners who own strategic land, please contact Andrew Cowling for an initial consultation on a no-obligation basis via firstname.lastname@example.org or by telephoning 01858 435970.