With property prices soaring, buying land may seem like a second best option. However, in this current climate land’s actually a fantastic investment – with the average price of farmland increasing by three times that of property, according to reports.
Here’s our definitive guide to investing in land…
What are your objectives?
Why are you seeking to purchase land? Make sure you’re clear of your objectives. For example, some see land as an alternative investment, while others are looking for self-build projects. Whatever your requirements, make sure you properly evaluate the costs and the risks and ask yourself if it’s the right purchase for your overall objectives.
How much land costs you depends on several factors, such as the location, size, proximity to transport and whether the land’s been granted planning permission. Land values are soaring at the moment as there are lots of demands for property and land tends to reflect this. Make sure you research the area you’re looking to buy in carefully to see the cost of other plots close by, as only this way will you get a good understanding of the true value.
The right plot
Land for sale is either Brownfield (land that has become vacant or derelict), or Greenfield (parks, forest and countryside). To find out how to discover the right plot, it could be a good idea to contact a specialist land or estate agent. You could also ask local developers if they’ve any individual plots for sale. Other good sources include local authorities; auctions; utility companies that have surplus land and you can also make private enquiries. Right now, it’s rather competitive finding good plots, so it could be worth trying to find people who’ve overloaded themselves with projects they can no longer go through with rather than going through the traditional channels.
Location is also vital – always have an eye on a resale when using land for a self-build project. Plots that are convenient when it comes to transport links, shops and amenities are always a good bet. If the land’s for residential redevelopment in a rural location, property usually has to have something unique about it to achieve a good resale.
Surveying the land
Make sure you conduct a proper survey of the land by an independent land surveyor, ideally a member of The Royal Institution for Chartered Surveyors (RICS). This will highlight all boundaries; flood risks; public right of way; environmental impact assessments etc. One key advantage of having land properly surveyed is that Title Deeds are often outdated and boundaries can change over time.
When you buy land, there are three basic scenarios – the land either has no planning permission, outline planning permission or full planning permission. It’s key to make sure that the local authority will allow you to develop the land, as even if you acquire a property with planning permission you may not be able to build on it as there may be restrictive convenants on it (make sure you consult your lawyers).
You could always buy land with property on it already, as it benefits from past precedent and you can easily get full planning permission if your plans are reasonable and the council assesses them to be in line with the local neighbourhood. Make sure you build a good relationship with your council’s planning office, you are this way more likely to receive a favourable response from them. Involve them in the process from beginning to end and you are likely to get approved initially.