There is an ongoing demand for new houses, workspace and supporting infrastructure across England, Scotland and Wales. Much of the development will be on land that is farmed or grazed now, or left undeveloped. For the owners of that land, it is both an opportunity and a dilemma. Can we realise its development potential without the danger, cost and difficulty of dealing with the planning system ourselves? Strategic land promotion is the answer for many people.
This article outlines what strategic land promotion is, how it differs from a regular sale, what the process looks like, and what landowners need to consider before signing up for it.
What is Strategic Land Promotion ?
Strategic land promotion is the process of seeking planning approval (or an allocation within a local plan) over a number of years for land that does not currently have planning permission for development. The planning process is undertaken and the financial risk is borne by the promoter who may be an individual specialist or a larger organisation. In return the landowner promises to provide the land and shares in the rise in value should the project be successful.
The key term is “strategic.” This has nothing to do with opportunistic applications on small parcels.” It’s about locating land that is well-located to fulfil future development needs, and then planning wisely for the long-term.” This could be by influencing how a council allocates sites in its local plan, bringing together land from a number of owners or showing that an area can be made acceptable by providing additional roads, schools or open space.
Why Permission Can Make Land So Much More Valuable
The difference between the value of agricultural land and the same land with residential planning authorisation might be enormous. Productive land is valued according to its productive capacity, whereas land with planning permission for houses is evaluated in terms of its building potential. And the difference can be many times the original value.
That disparity is exactly why strategic land promotion is attractive. The value uplift and the knowledge, patience and expenditure needed to secure it are developed in the planning process. Usually a landowner who sells without permission will get some fraction of the final value of the land. Someone involved in a strategic land promotion might share in a significantly greater sum but only if the project succeeds.
How It’s Different from Selling Now
In a typical sale the land is sold to a purchaser at an agreed price. Frequently the purchaser will take the planning risk and decrease the price accordingly. Conversely, strategic land promotion usually entails a contract, where the landowner keeps possession of the land until authorisation is secured. Then the land is sold usually on the open market and the proceeds are divided in an agreed proportion after the promoter’s fees have been removed.
This arrangement would align both sides’ interests. The Promoter only gets paid if they get planning permission, so they have every motivation to do the job successfully. Meanwhile the landowner does not have to pay planning applications, technical studies or legal fees which can reach into hundreds of thousands of pounds for a large property.
There are other options, such as option agreements, where a developer gets the right to buy the land at a discounted price (below market value) once permission has been granted. Each structure has various consequences for risk, time and return thus independent guidance is vital.
Steps of the Procedure
Strategic land promotion typically follows a discernible sequence, despite the fact that every project is unique. The first stage is an appraisal of the land potential. This includes consideration of location, accessibility, closeness to existing communities, environmental limits, flood risk, landscape sensitivity, ecology, heritage and the policy context set by the local authorities. That rules out a lot of sites, which is a sensible consequence and saves everyone time and money.
If the site looks promising, then it’s time to negotiate conditions. This formalises the arrangement and sets out the duration of the arrangement, how costs and proceeds will be shared, what happens if consent isn’t obtained and how either party can withdraw. These agreements can be lengthy and sophisticated, and legal advice is critical.
Then the promoter gets down to the nitty-gritty. Surveys are commissioned, design concepts are worked up and conversations are started with the local planning authority, regulatory authorities and the local community. The site could be put forward for allocation when the council is creating a new local plan. This is often the most powerful phase, since a subsequent planning application is very much supported by an allocation.
When the policy position is favourable, a full or outline planning application is developed and filed. It will be underpinned by technical evidence on transport, drainage, ecology, landscape and other topics. Then the authority considers the application and if it is refused it may be appealed against. Finally, after the land is approved, it is advertised and sold to a developer and the money is divided as per the agreement.
How long will it take?
Strategic land promotion calls for patience above everything else. It takes five to 10 years, sometimes much longer. Local plans are published over a period of several years, and can be deferred or altered. It might take months to decide on planning applications and even longer to appeal.
Landowners should see this as a long-term strategy rather than a way to make a fast buck. If you need to unlock funds quickly, it’s not for you. For those with the patience to wait, however, the possible rewards may be worth the wait.
The Risks Involved:
Strategic land promotion should not be presented as a sure thing. Lots of sites don’t get planning authorisation. Policies can shift, local opposition can be crucial and environmental or technological obstacles can arise which cannot be overcome. If the project fails the landowner normally gets nothing, but he also incurs no expenditures as long as the deal is structured the normal way.
There are additional things to consider. Land that is tied into a promotion agreement can be difficult to sell or use in other ways throughout the term. Tenancies need to be managed properly – farming tenants may have rights which can affect when development takes place. Tax matters can also be complicated and involve capital gains and inheritance planning and landowners should seek counsel from an accountant with experience with developing land.
Selecting the Proper Promoter
The choice of promoter is probably the most essential decision in the entire procedure. Experience counts. Reputation counts. Track record counts. Ask about previous initiatives, how many got to allocation or permission and how long they took. If feasible, talk to other landowners who have worked with the promoter and get a feel of how communication was handled.
Never forget the promoter’s contacts with local officials and the community, which can be the deciding factor. The constructive and honest promoter has a considerably better chance of success than an adversarial promoter.” Finally, read the financial terms thoroughly. Understand the share of proceeds, the definition and cap on costs and the exit possibilities. A fair deal should be open and equitable.
Why it’s important to get independent advice
Landowners should never proceed without independent expert assistance since strategic land promotion entails considerable monies, extensive periods, and legally enforceable commitments. A solicitor who understands development agreements can explain the legal issues and negotiate protections. A chartered surveyor can advise on the viability of the land and the reasonableness of the arrangements. A CPA can help with tax planning, which can make a big difference in net return.
Taking counsel early is not mistrust. It’s just good practice and a decent promoter will embrace it. An educated land-owner is a better partner, and the ensuing agreement is more likely to last.
Involvement with the Community and Environment
It’s not simply about getting approval, modern strategic land promotion. Planning policy is increasingly anticipating that projects would bring benefits beyond housing, such as affordable dwellings, open space, biodiversity gains, sustainable drainage and contributions toward schools, health services and transport. Strong schemes tend to be produced by promoters who plan for these from the start.
Community engagement is just as vital. People who live there often have genuine worries about traffic, pressure on services and loss of green space. Listening to these issues and carefully reacting can enhance designs and lessen opposition. “It is reassuring to landowners to know that the land they have nurtured, perhaps for generations, will be developed responsibly.
The whole estate in question
Strategic land promotion should be considered for farmers and rural estates as part of a larger plan. Selling off a block of land for development could fund investment in the rest of the farm, help with succession planning or give a more secure financial foundation for the next generation. Likewise, development on one side of a holding may impair access, amenity and functioning of the remainder of the firm.
Early awareness of these impacts allows landowners to steer the project toward greater alignment with their broader interests. For example it may be able to hold onto some parts, get better infrastructure or negotiate terms to ensure the long-term profitability of the farm.
Is it for you?
Not all landowners will be suitable for strategic land promotion. It is for people with land that is really developable, who can afford to wait, and who can cope with uncertainty. For individuals who need to sell fast or are uncomfortable with long-term contracts, it is not so favourable.
A good first step is to get an honest assessment of the likelihood of your site being targeted for development. Look at your local plan and see where neighbouring sites have been allocated and enquire whether your land is well connected to existing settlements. Even if the response to the question is that the site is unlikely to be suitable, a candid appraisal has value in itself.
A Long Term Relationship
At its best strategic land promotion is a collaboration of trust, knowledge and common aims. The landowner gives the asset and patience. The promoter provides specialist skills, funds and an expertise of the planning procedure. When both parties work together properly, the result can be sustainable development that meets local requirements and provides a fair reward to the landowner.
If this is the path you’re thinking about, the key is to do it with realistic expectations, good advise and a clear awareness of the risks and rewards. When executed well with the right partner, strategic land promotion may transform land with promise into a long-term source of benefit for families, communities and future generations.
