What to Consider when Purchasing Land for Residential Development

Caroline Major, head of Commercial Property at Else Solicitors examines the key issues for developers to consider when purchasing land for the construction of residential housing.

With a strong demand for new houses across England, and a shortage in housing (particularly affordable housing) recognised by all major political parties in their 2019 manifestos, businesses looking to purchase land for residential development need expert advice to ensure that their investment in land pays the dividends they hope for.

At Else Solicitors, we work with our clients and their technical advisers to investigate the land being purchased and we advise clearly on the possible risks and rewards of developing any particular piece of land. Amongst a number of other possible issues, we advise our clients on the following:

  1. Access – Is access to the Property from a public highway, or do rights need to be obtained over someone else’s land? Considering this issue carefully at an early stage can prevent an unexpected surprise later on or a pause in building work while a price to gain access over someone else’s land is agreed.
  2. Services – Will services (pipes, wires, etc.) pass from the development to the highway, or again, do rights need to be obtained to run services under someone else’s land? It is also important to obtain rights to enter neighbouring land to lay, and later on maintain and repair, services. There may be historic rights to use services passing under a neighbour’s land but these may not be suitable (and could possibly be extinguished) if their use changes significantly. A farm, or land with one house subsequently being used for a housing development is a classic example of this change in use.
  3. Covenants and Easements – We advise on any historic covenants and easements affecting land being considered for development. Amongst a myriad of others, some land is affected by old agreements not to build without the consent of a neighbour, or not to sell the land without accounting to a previous owner for an increase in the value (overage). There may be rights of way on foot over a property, or rights to run services under it, which affect our client’s ability to build on it. It is our role to advise whether any such agreements are still enforceable, whether they are likely to affect the development of the land or the attractiveness of individual plots to buyers and their mortgage lenders, and if so, how the impact of these agreements can be reduced.
  4. Contaminated Land – depending on the historic use of land, liability for past contamination can pass on to future owners. Understanding the implication of environmental searches, enquiries with the local authority and surveys obtained by our clients allows us to advise how best to deal with the issue of contamination in the contract and transfer for the sale of the land.
  5. Nearby land use and development – it is also important to consider the ownership and likely use of nearby land and if this might affect the attractiveness of new homes to buyers. It is our role to help our clients investigate this.

Along with these initial investigations, we also assist our developer clients with planning and utilities agreements, exclusivity/option agreements, conditional contracts, Stamp Duty Land Tax and any other issues they may face in connection with development land. If you are considering purchasing land for development purposes, we would be happy to speak with you to discuss your requirements and how we can work together.

For more information please contact our Commercial Property team on 01283 526200.

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