The top five things to consider when buying land for development
Whether you are a long-standing property developer, or are new to developing land, choosing the right site can be a considerable and time-consuming investment. When buying land for development, you need to know exactly what you are purchasing and be aware of any restrictions on the land that could hinder or limit your plans.
As a leading South West law firm, GA Solicitors advises a high number of property developers on land purchases every year. Here are our top five factors to consider before buying land for development.
- Types of investments
There are different types of investments available to potential developers across the country, such as bare land or “development-ready” land. Examples of “development-ready” land can include commercial units which can be converted into residential apartments, or land with approved planning permission. Additionally, there are opportunities to purchase bare land to develop.
Land can also be known as greenfield sites (land that has not been developed before) and brownfield sites (have been developed in the past).
There are pros and cons for each individual opportunity, dependent on the objectives and goals of the proposed development, as well as other factors like location, cost and likelihood of gaining planning permission
- Location and accessibility
When buying land for development, it is important to first consider accessibility to the development site. Are there transport links such as roads, rail and public transport nearby? Is there sufficient infrastructure in place at the site?
It is also important to examine where the nearest utilities are, such as water, electricity and sewerage. The further the distance to bring these utilities to the development site, the more costly it will be.
- Understanding risk
When buying land for development, it is important to examine the physical characteristics of the site. Factors such as flood risk, topography and investigation of invasive plants are important considerations before building or constructing on the site.
If there is a risk of flooding, then a high amount of resources may be required to reduce the risk which may lead to your project becoming unprofitable.
Another good example is the existence of the infamous Japanese Knotweed which can be very expensive and difficult to remove. It can also cause issues with lenders who may want to know a plan is in place should Japanese Knotweed be present.
- Reviewing the title deeds
Due diligence is essential when buying land for development and could save you hundreds of thousands of pounds. Due diligence includes undertaking a review of the title deeds and also a number of searches to ensure that the land is suitable for development.
A review of the title deeds will check against a variety of rights and charges. For example:
- Whether the land benefits from any rights (i.e. rights of way)
- Whether the site is subject to any obligations to third parties, such as a right of first refusal
- Whether any rights are reserved for owners and occupiers of neighbouring land
- Whether there are any outstanding financial charges on the land.
- Searches
Searches are essential and will consider if there are any environmental issues on the land such as contaminated land, flood risk and/or nearby infrastructure schemes. They will also help to determine where the nearest adopted highway is, and the nearest drainage and water pipes which can supply the development.
When buying land for development, it is important to undertake a thorough due diligence process as there may be hidden rights or issues which could cost a significant amount of money to remedy, in addition to the funds you have already invested in the purchase and development of the land.
Building on contaminated land for example may lead to a number of hurdles and require special equipment and a need to meet additional planning stipulations.
Buying land for property development can be exciting and it can be easy to get carried away. Choosing a property development solicitor with experience can ensure that your investments are protected and that you purchase a site best suited to your needs.
GA Solicitors’ commercial property team is experienced in supporting property developers in the sale and purchase of land and is well-versed in the due diligence process required. The team also understands the commercial needs of developers, providing savvy and essential advice to keep you and your projects on track.
If you are a property developer looking for advice, you can contact GA Solicitors’ property development team in Plymouth by calling 01752 203500 or email enquiries@GAsolicitors.com.
You can also read a recent article about a recent property development scheme here.
GA Solicitors in Plymouth is ranked in The Legal 500 UK, The Legal 500 Green Guide, Chambers UK and Chambers High Net Worth.
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