There’s a lot of excitement in owning land with development potential, but translating that potential into a profitable construction site may be a complicated process. Planning policy, technical studies, environmental considerations and talks with planning authorities can all impact whether the site is suitable for development and the eventual value that the property can attain.
Many landowners see collaborating with a land promotion company as an opportunity to progress these challenges without having to manage every single stage of the planning and promotion process themselves. Usually a land promoter will seek to obtain planning clearance or improve the planning prospects of the site before assisting in bringing the land to the open market.
Knowing what a land promotion company can do for you will help you approach the relationship with realistic expectations and make smart decisions regarding your land.
What is a land promotion company?
A land promotion company usually works with landowners to enhance the development possibilities of a location. Instead of simply buying the land, the promoter may engage into an agreement with the landowner to promote the site for development.
The precise nature of the arrangement may differ but the essential concept is that the promoter takes on the onus of moving the planning and promotional strategy forward. This could include the commissioning of technical investigations, liaising with planning professionals, preparing planning submissions and marketing the land after a suitable planning position has been reached.
It may mean a landowner can tap into professional knowledge and resources, without having to organise everything themselves.
The first assessment
Usually before entering into an agreement a land promotion company will want to know the characteristics and potential of the land.
This could include consideration of its location, size, access arrangements, neighbouring development, planning history and interaction with existing settlements. Local and national planning policies may also be taken into account to determine whether there is a realistic prospect of development.
At this point there is no certainty that a site will eventually be granted planning authority. Planning decisions are affected by a number of factors, many of which are outside the control of the promoter;
Thus, all possibilities and possible difficulties should be considered in the first appraisal. A realistic assessment will uncover problems to be addressed before the land can be marketed profitably.
Agreeing the relationship:
If the site seems as if it has the potential for development, the following stage is usually to agree how the landowner and the land promotion company will work together.
The legal contract is an important part of the relationship. It should detail things like who is responsible for what, how long the arrangement lasts, how costs will be dealt with, what happens if planning permission is obtained and how the land may ultimately be sold.
Landowners should obtain proper independent professional counsel before signing any such agreements as they may have serious financial and legal ramifications.
You need to know not only what the promoter is supposed to accomplish but what the landowner is committing to do.
The planning policy
Once an agreement is signed, the land promotion company can start to build a strategy for the location.
This may include considering how the site sits with the planning policies for the area and identifying what sort and scale of development may be able to be supported.
The planning strategy can evolve as more data are provided. Technical investigations, interactions with planning authorities or changes in planning policy may lead to modification of the initial assumptions.
So a good plan has to be adaptable yet at the same time have a defined purpose.
Technical studies
More than just putting in a planning application is involved in promoting land for development. A land promotion company may have to carry out various technical studies to ascertain whether development is feasible and what obstacles might have to be overcome.
The scope of these investigations will be site specific but may cover issues such as highways and access, drainage, ecology, landscape, flood risk, archaeology and utilities.
The findings have implications for development ideas. An ecological appraisal, for example, may highlight regions that require protection, whereas a highways appraisal may affect where access points are located.
These investigations might take time and may require the use of professional consultants. One reason, therefore, why land promotion is usually a longer-term process rather than something that can be achieved within a few weeks;
Working with planning authorities
It is crucial in the procedure to communicate with the relevant planning authorities.
A land promotion company may liaise with planning officers to get a sense of how the property would be viewed and what difficulties may hinder its prospects.
This does not imply that the promoter can guarantee a particular planning result. Planning authorities have to determine proposals and applications in accordance with relevant policies and other material considerations.
However, early interaction can help detect potential concerns and provide an opportunity to improve concepts before a formal application is made.
This may at times be a stage which the landowner perceives as having little visible activity, yet there may be a lot going on behind the scenes.
Make a planning application
If the site is found appropriate for a planning application, the land promotion company will generally arrange for the appropriate planning documents to be prepared.
This may include architects, planners, engineers, environmental specialists and other consultants.
The application should be sufficiently complete to enable the planning authority to examine the merits of the proposed development. This can lead to a significant volume of paperwork, depending on the magnitude and nature of the project.
During this procedure the landowner may be asked for information or to answer queries but much of the co-ordination can be done by the promoter and its professional team.
The value of patience
One of the greatest things a landowner should expect when working with a land promotion company is the process can take time.
Planning systems are multi-stage and the timeframe of decisions can be altered by consultations, technical work, policy changes and requests for further information.
A site may also require promotion through a wider planning procedure before a planning application may be considered.
This means landowners should not treat the deal as a fast fix to a speedy sale. Land promotion is a strategy, often designed to release more value over time.
What happens if planning clearance is granted?
If planning clearance is given, the land might be a lot more desirable to potential developers.
The land promotion company may now begin to market the site to prospective buyers. The common goal is to develop interest and get the best possible result in terms of the agreement.
The final worth of the site will rely on a number of factors including planning clearance, development costs, market circumstances, the type of development allowed and demand from potential purchasers.
Just because it’s got planning permission doesn’t imply it’s going to sell for a certain amount.”
Sale of the land
Once an appropriate planning position has been reached, marketing can be a big part of a land promotion company’s duty.
The land may be put in front of developers and other possible purchasers. They’d be provided with the information necessary to appraise the prospect.
Potential purchasers will compete with each other in helping to create market value, but not a specific sale price or timescale.
At this stage the promoter’s experience and knowledge of the development market can be helpful particularly when dealing with queries, appraising offers and continuing discussions.
Cost control
Costs are something that should be considered by each landowner that has an arrangement with a land promotion company.
There might be significant spend on planning applications, surveys, consultants, legal work and marketing. The agreement should explicitly specify which costs the promoter is originally accountable for, and how those costs are finally recouped.
In many agreements the promoter pays or fronts the costs of promoting the land and receives the costs plus an agreed return from the final selling earnings.
But this varies – so landowners should check the financial details carefully before signing up.
What if planning permission is refused?
There is no certainty of planning permission being granted. A land promotion company can spend a lot of time and money on a property that never delivers the expected planning goal.
If your application is declined, there may be scope to appeal, change the proposal or pursue an alternate planning strategy. Which of these choices is appropriate will be determined by the reasons for refusal and the circumstances of the location.
The agreement should state what occurs in this case and whether the promoter can still look at planning prospects.
Landowners should make sure they understand these provisions before signing a promotion agreement.
Contact with the owner of the land
Good communication is the foundation of every partnership with a land promotion company.
Significant developments should be kept the landowner informed, particularly when choices are to be made or the planning policy is to change.
However, communication does not necessarily entail getting constant information. There may be long stretches of technical work on planning projects where there may not be much news to report.
The agreement or initial discussions can be important in setting out how communications will work and how often progress will be assessed.
Knowing the hazards.
Land promotion can be a viable avenue for increasing the value of the land. But it also has the uncertainty.
Planning policy might alter, technical challenges can occur, local objections may be generated and market conditions shift. A well-prepared proposal may not get the desired outcome.
Many of these processes can be handled by a land promotion company but it can’t take away from the inherent dangers of planning and development.
Landowners should therefore assess the possible benefits against the timescale, contractual commitments and uncertainties involved.
The value of guidance
Landowners should always seek independent legal and financial counsel before signing a contract with a land promotion company.
A specialised advisor can help clarify the terms of the agreement, which include the promoter’s obligations, the duties of the landowner, expenses, termination clauses and eventually how the proceeds might be shared.
Promotion agreements can run for a number of years and include considerable quantities of money and hence independent guidance can be particularly useful.
The goal should be to ensure the landowner understands the agreement prior to signing on the dotted line.
A long term view of land worth
The most common way to unlock the value of land is to work with a land promotion company over a longer period of time.
Instead of selling on the open market on the basis of its existing usage, a landowner may have the chance to pursue a planning strategy that would enhance the site’s appeal and value to the development market.
It’s a process that takes time.” There might be a lot of technical labour, planning talks and uncertainties before a successful conclusion is realised.
For landowners who lack the experience, resources or time to conduct this process themselves, collaborating with a land promotion company can give access to specialist planning and development knowledge.
Ultimately, there should be a clear knowledge of what each side is responsible for and what the possible outcomes could be in the partnership.
Making an educated decision
For any landowner, the decision to collaborate with a land promotion company is a big one. The correct set up will rely on the qualities of the site, the intentions of the owner and the development options available.
Landowners should anticipate to be involved in research planning, technical evaluations, expert advice, involvement with planning authorities and eventually, when successful, marketing to potential purchasers.
The process can be complicated and lengthy and there is no certainty of planning permission or a sale price. But the right technique can help to unleash the development potential of land without the owner needing to be involved in every element of the process.
However, if landowners understand the nature of a land promotion company and they analyse the proposed agreement carefully and take independent professional counsel, they might have realistic expectations of the process.
The major draw for many landowners is the ability to convert land with an unknown or limited immediate value into a site with a stronger planning position and higher appeal to the development market. It takes time, expertise and careful management to get there, but knowing what to expect from the beginning can make the path a lot clearer.
