Legacy Development Q&A
Landowners may live with the consequences of their development decisions for years to come.
"Legacy developments" allow landowners to exert a certain level of control in the design, construction and even management stage of projects, which can ensure the outcome enhances reputation and delivers desired financial, social and environmental returns.
1. What are the key recent updates or developments landowners need to be aware of and looking forward what’s in the works that may come to pass soon?
Hannah Beamish (HB), Partner, Residential Development: The residential development land market is currently extremely buoyant; with scarcity of immediate development opportunities driving land values to record highs.
During Covid and the lockdown periods a lot of planning applications have been held up, creating a lack of supply, which is heating the land market up and encouraging house builders to look at sites they would not normally have considered two or three years ago.
Rob Hopwood (RH), Partner, Planning: All new developments going forward will be required by authorities to deliver a 10% uplift in biodiversity on development sites or if not on site, off site. This emerging field of Biodiversity Net Gain, as it is known, has become hugely important when preparing applications in responding to the UK’s Climate Change ambitions.
It requires specialist advice and a good understanding of both legal frameworks and ecology but is no longer just a ‘nice to have’.
2. What are the most common issues with planning applications / what mistakes do people make most often?
RH: Applicants can underestimate the high level of detail required by Local Planning Authorities to register and consider a planning application. Applications will be delayed or even refused if planning policy and site issues are not sufficiently recognised or mitigated.
Applicants need to consider what impacts their proposals might have on neighbours, local infrastructure, services and the environment. It’s so important to highlight any key issues and understand how to deal with the issues before an application is submitted.
It is also very useful to identify who the local decision takers are and obtain their views in a timely manner, such as parish council, district and county councillors.
3. If under an option agreement the land value is a negotiation, why as a landowner would you not get a clause written into the agreement that states you could sell a proportion into the open market to get a true value?
All sites have their own distinct issues and opportunities so there is no one rule to apply here. When you enter into an option agreement, you're entering into it under a different premise than you would under promotion agreement.
It all depends on the time, effort and risk you have the appetite for.
4. How much should a landowner expect a land promoter to take (in terms of % of sales value)?
HB: There's a saying that says, ‘valuation is an art, not a science’ and it’s a slightly corny phrase but so true. There's a lot of work that needs to go into looking at what the value of land is.
You need to look at comparable sales and asses all the variables around risk and how its measured and valued in the scheme. You must also recognise the local authority requires and community benefits which might be delivered as part of any scheme.
5. Who is best to value the land as part of the development process?
HB: This depends on the nature of the valuation required. Each site is different and requires a specialist advice from a suitably qualified agent.
6. How can a planning consultant be useful?
RH: A planning consultant will identify the most important issues at the outset of a proposal and advise how the issues can be best be dealt with to reduce the risk of obtaining a refusal from the council.
If the landowner is considering a development proposal which they feel may be outside of their skill set it may be beneficial to employ a planning consultant to provide clear and timely advice.
There will be a cost for a planning consultant to provide advice however, the advice given at an early stage can save on unnecessary abortive costs later in the application process.
7. What sort of agreement with a developer would give the local authority comfort that the site will be delivered?
RH: A well negotiated planning permission should be flexible and viable or it may not get built. A planning and residential development consultant can help to secure a marketable planning consent by seeking to optimize the value of a site and securing a workable and deliverable permission.
A section 106 agreement will also ensure that key council policy objectives are met yet and, at the same time, enable a developer to deliver a successful and high-quality environment. Planning conditions will always be preferred to a legal agreement as they can be appealed or varied by an applicant more easily than a legal agreement.
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We've brought together market commentary, research and insights from across our Rural, Planning, Residential Development and Commercial teams, keeping landowners and farmers well informed on key topics that matter right now.