6 tips for a sound investment when buying land

What are the benefits of investing in land?

Investing in land can feel like a risky endeavour, but with the right mindset and knowledge, it doesn’t have to be. Buying land can also be very lucrative. According to the UK Land Directory, residential land prices have risen eight-fold over the past 20 years, with UK land values continuing their upwards trajectory despite rising building costs.

What to consider before buying land

Despite all these positive signs, buying land and finding the right plot can be daunting for first-time land investors. With that in mind, here are 6 tips to help you make the right investment.   

Get a feel for the market

If you’re new to land investment, you should get a feel for the type of land on offer and how it differs in price based on its location and quality. You can pay anything from £5,000 to £15,000 per acre for land, but you need to know what you’re buying.

Generally speaking, land in areas with new developments nearby will typically be more expensive and represent less risk. And land in those areas with planning permission will attract the highest price. 

If you’re happy to take on some additional risk and are in no rush to cash in on your investment, you can potentially make better returns by buying land in up-and-coming areas. They could be areas that are being regenerated, are close to new transport links or have businesses setting up nearby. This approach will be more risky, particularly if the land does not have planning permission, but the profits could be worth it if you’re prepared to play the long game. 

How to build a long-term land investment plan

Once you know the type of land that’s available and its price, you can start to think about what you want to do with the land. That will help you determine where to buy and what kind of plot you’re looking for.

Potential goals include a self-build residential project, developing the land yourself, obtaining planning permission and selling it for a profit or simply sitting on the land until the time is right. Once you have a plan, you can then start putting it into action. 

How to check planning permission for land

Planning permission is so vital to many land investments that it can make the difference between a good deal and a bad one. Land is often sold with ‘outline’ planning permission, which means you’ll need to obtain full planning permission within three years. Even if a plot has detailed planning permission, it still doesn’t guarantee you can build on it, as restrictive covenants and other legal restrictions may apply. This is where the assistance of an experienced team of land experts is invaluable.

If you have your eye on a plot with no planning permission, factor the cost and time implications of the application into your investment. You can also include specific provisions in the contract to make the completion of the deal conditional on planning permission being granted.

Why is it important to get land surveyed?

There may not look like there’s much to survey in an empty field, but there are plenty of technicalities, such as boundaries, rights of way and overhead power lines, which can cause big problems.

So-called ‘ransom strips’ are something else to look out for when buying land, as they can cause access issues by separating your land from the public highway. Environmental problems, such as flooding, contamination and Japanese Knotweed etc., can also cause all sorts of issues when it comes to reselling. These are all things a surveyor will help you identify. 

Determine if there are usage restrictions

When buying land, you need to know if there are any restrictions to prevent conflict with the local council and fines for flouting planning rules and regulations. On the whole, the restrictions will usually benefit you and the local area, but if they’re not in keeping with your plans for the land, it’s better to look elsewhere. Getting yourself in the know now will help you avoid any headaches later.

Check the availability of utilities

The land might be in a beautiful area, but if there’s no access to water, sewers, electricity, phone and (fast and reliable) internet, it may not be the right plot for you. As most people buy land to build on, you should be mindful of anything that could harm your return on investment.

Further advice on investing in land

Find out more about buying commercial and residential land for development and get in touch with our commercial property agents for professional advice. We can help you identify the perfect piece of land, complete the due diligence process and guide you towards completion while protecting your interests throughout.