Option Land

In recent years, major developers have secured conditional options to purchase on vast tracts of land throughout England.

How do these options work? In simple terms, a landowner will grant a property developer an option for a fixed term of years to purchase their land. The eventual sale price is usually agreed at a percentage of market value once a suitable planning consent is secured for development. As part of the deal, the developer will be responsible for promoting the site for development through the planning process. This can be costly, time consuming and may not always end in success.

If you are a landowner and believe that your property has potential for development your options are:

• Do nothing beyond sitting back and waiting to be approached by a developer or investor interested in acquiring your property. This is a risky option. Your site could end up not being considered by the planners as a future development option. Or the planners may decide to favour another site that is being actively promoted for development.
• Take responsibility for promoting your property for development through the planning process. This can be very costly. It may be right for you if you can comfortably afford the investment required and you are prepared to accept the risk that you may ultimately loose your investment if you are unsuccessful.
• Invite developers to submit offers for an option to acquire your property in future for development. In return for bearing the planning costs and accepting the risk of loosing its investment, the developer will want an option to purchase the site at a discount to full market value once planning consent is secured.

If you suspect that that your property has potential for future development and you want to learn more, feel free to contact us for some initial impartial advice without obligation. Howse Associates act for landowners looking to sell development options and for developers and investors looking to secure development options.

Contact Adrian Howse or Richard Bone (tel. 01892 775757).