Landsite has been receiving a growing number of calls from concerned landowners who have found themselves signing into a promotion agreement with a land promoter and several years (sometimes months!) into the term of the agreement are now being approached to either change it or 'run' with a particular developer, suggested by the promoter.
This causes alarm for landowners as they will have been persuaded of the benefits of a promotion deal, only to find that a different or watered-down solution is now being offered.
The reason(s) behind this appear twofold - firstly, the promoter has decided that they do not after all have the risk appetite or indeed in some cases the actual funds to obtain planning permission and progress the deal and would prefer to leave this to a well-heeled plc housebuilder and / or, secondly they have found the planning process is taking much much longer than they anticipated and perhaps they do not have the necessary experience or funds so they want to get back some of the money invested to date and take an easier route (potentially at the expense of the landowner !)
Whilst Landsite has not witnessed this happening with the major land promoters (e.g. companies who are part of the LPDF (Land Promoters & Developers Federation), nevertheless, it appears to be a growing problem. Also, some land promoters have begun selling their business to plc housebuilders in recent years and it is difficult to properly establish whether these companies will now ask landowners to enter into an Option Agreement or even where the Promotion Agreement remains, whether there is genuine clarity about the site being properly and fully market-tested and thus sold to the highest bidder. If, in time, the highest bidder is consistently the housebuilder owner then questions may be asked.
Plc housebuilders too seem to be 'stopping and starting' with a common complaint from the land managers and directors in the sector that the 'tap is being turned on and off' - recent announcements by Chief Executives of major housebuilders indicating they are holding back on buying land and closing sites has spooked a number of landowners who now wonder what the commitment is to their site. The fact that many of the land staff on the housebuilders move from company to company every few years does not help - something which is noticeably less the case with land promoters - perhaps the employee conditions or the people attracted to to work for land promoters are more motivated to stay there for longer.
The attitude I have found at most Land Promoters is one where they are 100% honed to getting planning permissions delivered and of course all they do is land. Their structures are also very 'team' like and flat which helps for a good work ethic and they seem to employ more women - who are universally better at this business than the men as they have the right approach, insight and tenacity.
Conversely, the plc housebuilders retain very corporate structures with a strong heirarchy and multiple matters such as sales rates, technical matters, build programmes and health and safety to distract them from...LAND. This of course means that the land element of their business is not top of the agenda and (in my opinion) landowners are certainly not at the top of their agenda !
With a probable Labour Government in place by early 2025 and 6 months later Lisa Nandy (Shadow Secretary for the Department for Levelling Up, Housing and Communities) may possibly seek to 'punish the tory shires' and take the lid off development restricted greenbelt and land around urban areas. Or perhaps not - if we are to believe that Sir Kier Starmer will embrace middle england as well as appealing to traditional Labour voters.
For landowners, the very slow and complex planning system together with the awful parish, district, county and national politics are the main enemies to successful development of their land.
Our advice remains to do deals with well-funded land promoters with a good track record and who can demonstrate they can and will deliver.
Call us anytime on 07971 389985 or email email@example.com if you have a potential land for development or a site you want to discuss.
Good luck landowners and regards,
John Holland, Director, Landsite Limited - Specialist Site Finders and Consultants to Landowners, March 2023
About this Blog :
Some useful articles & links to resources which landowners can read and connect with to assist them with learning more about the process, pitfalls, challenges and positive outcomes for selling their land.