Land promotion and the planning system
Local planning authorities are required to have a Local Plan which allocates parcels of land within their boundaries for future development, enabling the Council to plan where the space for housing, offices, retail will come from as well as where infrastructure will be needed in the years ahead.
Land which is not actively promoted through the planning system is unlikely to be chosen by councils due to concern about its potential future delivery.
Promoting land through the system is no mean feat, one which often takes many years and costs large sums of money, all at risk if the Council doesn’t choose that piece of land. For example, a fairly typical urban extension of 1,000 homes will cost between £1m and £2m to take it all the way through the planning system.
This is where land promoters come in, working with landowners to add value and later with housebuilders to bring suitable land forward. Small and medium sized housebuilders often do not have the skills, capacity and ability to promote strategic land making our role a crucial one in terms of ensuring diversity in the housing industry.
Promoters bring land forward for development in three ways, by:
- Planning (promoting the site through the Local Plan process and/or securing outline planning permission);
- Land Disposal (transferring the control of the site from the landowner to the builder); and,
- Construction & Sales (building and selling houses on the site).
How do land promoters and housebuilders fit into the planning system?
We work with landowners to bring their sites forward for development, assessing the suitability of the site, producing plans and engaging with the local planning authority to encourage the allocation of land for development and then to obtain planning permission.
We also work with housebuilders across the country, the small, family owned ones as well as the large plcs. The development sector is a risky one and we contribute to de-risking it for housebuilders by shouldering the burden of promoting a site through the planning process before handing over to them to apply for detailed planning permission which then enables them to start construction.
The risks in more detail:
Securing an allocation or permission is not a given. A plan-led system in which many areas do not have up-to-date blueprint creates a local decision-taking vacuum for those promoting land, meaning uncertainty in assessing development potential or seeking agreement with landowners. Once sites are being considered, uncertainty exists over responses from statutory consultees, the planning authority’s interpretation of material considerations for the proposal, its preferences over spatial strategy, and local politics. In simple terms, having a site that is suitable for development does not guarantee that it will be allocated or granted permission. Appeals – with all of their costs – carry significant costs and uncertainty. Even when outline permission is granted – thereby establishing the principle of development – reserved matters approval can be refused. Decisions can be subject to judicial review. All of this means the outcome cannot be fully predicted at the beginning, and it may not be until after a significant investment (running into tens and often hundreds of thousands of pounds on planning fees and professional costs etc) that planning is resolved.
Sites carry uncertainties over technical and other constraints – for example, site conditions, ecology, noise, traffic impacts and highway works – which may not transpire until late on in the process, in turn impacting on the ability to secure planning approval, deliver the scheme in the form originally anticipated, or generating unforeseen costs/land assembly requirements for mitigation. In some cases, these issues arise post the grant of planning permission, and can impact on the timeliness of implementation and/or delay the commercial agreement between landowner and housebuilder.
Housing development projects typically feature a high number of stakeholders, all of whom have specific goals and incentives. For most development projects, there are three-four direct actors (land owners, land promoters, housebuilders, local authorities) and a series of indirect, but no less important, actors (for example, local community, statutory consultees, infrastructure providers, the Secretary of State) who have a role in the process. The decisions of any one party can be the difference between success or failure.
Those promoting sites have to address commercial risks surrounding land disposal/acquisition (negotiations between the parties, land and property market conditions), the construction phase (ground works, site access, access to labour, enabling infrastructure, construction costs and time, technical constraints), and sales risk (property market conditions, the absorption rate). These risks are self-evidently greater for larger-scale sites.
Common factor for all interested parties in development and it represents both a risk and a cost; the longer it takes for a development to be delivered, the most likely it is to encounter a downturn in the economic cycle or encounter political changes (such as a change in government or local policy). Even smaller sites typically count lead-in times (including planning) in years rather than months.