Many people dream of buying a plot of land to build their dream home on, but achieving it is far from easy.
We examine the market for building plots, explaining:
- Why they are difficult to find
- How to find a building plot for sale
- What is Right to Build?
- What are Custom Build schemes?
- What to think about when you are buying land and applying for planning consent
- Then, we give examples of plots for sale.
Why is it difficult to find a building plot?
Firstly, there is a shortage of building plots with planning consent, and delays and uncertainty in the planning system are leading to increasing development land prices. Secondly, you are up against a lot of competition from other self-builders, professional land finders, small builders and developers. As it’s not expected that large numbers of building plots with planning permission will come to the market soon, you must put yourself in the best position to be successful, which means being flexible with your requirements to widen your choice of plots.
How to find a building plot for sale
The usual methods are via estate agents, property auction houses such as Allsops and Savills and websites specialising in plots. These include Plotfinder.net, run by the Homebuilding and Renovating Magazine which enables you to identify your target area; Plotsearch, which is run by Buildstore; Addland, which has a research tool showing information on every piece of land in England and Wales; Grand Designs’ Landfinder magazine; Plotbrowser, from the team at Self Build and Design Magazine; The Land Partnership; Right to Build; Zoopla; Rightmove and the Self-Build Portal.
Bear in mind that estate agents will know about demolition and rebuild projects, and architects may also have helpful contacts. Another way to find a plot is to engage a professional land finder; they may charge a monthly retainer fee or a percentage of the plot purchase price.
Consult the Local Plan
The Local Plan will identify areas suitable for development in your preferred search area: you could also think about infill sites. Check local planning authority (LPA) websites as their planning registers record all applications and decisions. You may identify an interesting site where permission has been granted but work has not started and you could approach the owner.
It might be possible to spot a recent application for outline planning permission for a single house where the decision is awaited, and again, you could contact the owner to find out if they plan to sell the plot. If you find a plot with planning consent for a house, but the design doesn’t suit your requirements, you can make a new application for a different layout without invalidating the existing permission.
It’s also worth searching your local authority’s brownfield register for sites suitable for residential development. There may be opportunities with previously developed land, or perhaps with demolition and rebuild sites. While some plots are sold with planning permission, other types of land may have potential, such as a small plot behind existing houses, garage blocks or even house that could be demolished and replaced – but everything depends on getting planning consent.
If you are uncertain about whether to buy a house or build one, despite the complexities involved, finding the perfect plot and completing a successful self-building project can be a life-changing experience.
While the government aims to encourage self-building as one way of helping address the housing shortage, the demand for plots from potential buyers far outstrips supply.
Alex Tan, senior data associate at land research experts Addland said:
Last year’s Bacon Report estimated that the annual supply of 10,000 self-build plots falls far short of the 20,000 – 90,000 plots demanded. Whether LPA’s and the private sector can be galvanised into increasing the supply of plots remains to be seen; many planning departments are battling with understaffing and training issues.
The supply of self-build plots is fragmented across the private sector and off-market transactions and is dependent on new plots being ‘released’ (i.e., have planning granted on them) by LPAs. If you’re interested in a plot, your first port of call should be your LPA’s `Right to Build’ register.
LPA’s use this to monitor demand for plots – in theory, as the number of registrations increases, they should increase planning approvals so supply can rise to match demand. This isn’t always the case, however, so there are a number of other sources you can use.
The National Custom and Self Build Association (NaCSBA)’s Self Build Portal also lets you register for a plot. Land or property auctions can be a good source of plots, as unused or small plots are often put up for auction.
Finding and contacting land agents in your area is always a good start – even if they don’t currently have any plots, they’ll be the first to know when new ones do come onto market. As well as finding plots that are for sale outright, you can also try to find appropriate plots that aren’t and get in touch with the landowners.
Availability of building plots
Alex Tan added that councils are making building plots available, but progress is slow.
Between 2020 and 2021, 8,309 planning permissions were granted for self-build plots nationwide, an increase of 7% year on year. This supply is far outweighed by demand, however – 58,813 people were registered as interested in self-build plots, nationwide.
According to the National Planning Policy Framework, the overarching planning document for England, local planning authorities (councils and districts, the bodies responsible for approving planning) have a statutory duty to factor demand for self-builds into their development planning.
They are advised to “consider how local planning policies may address identified requirements for self-building to ensure enough serviced plots with suitable permission come forward” (Self-build and custom housebuilding Planning Practice, Feb ‘21). Central government is actively trying to increase the supply of self-build plots, in theory making LPAs more likely to approve planning on plots, though lack of support and guidance might prove a stumbling block.
Big increase in build costs
According to Richard Adamson, an auctioneer with Allsop property consultancy, there is demand for building plots but the planning process to actually bring them to market is slower than ever before. He said:
Getting planning approvals in Covid was very difficult – a bottleneck was created, and a lack of supply coupled with demand pushes prices up.
However, the real challenge now is the increase in the cost of building, which creates problems in calculating the ultimate build cost. We are seeing around a 60-70% increase in build cost. While the end value can be predicted, calculating what it is going to cost you to build is very difficult.
We have a Lot for auction in Newbury (on June 23), a great site with planning for seven executive homes with a guide price of £2.5m: the potential buyers are established developers locally who can be confident with the build costs, but lower down the chain it will be different.
A good case study is a Lot also for sale on June 23, Lot 106, for a single self-build house plot in Shenfield, Essex, on the Elizabeth line with a guide price of £480,000. It has planning permission for a detached three storey, five-bedroom house covering 2,474 square feet. The final value after the build may be £1.2 million.
This would typically have been a popular type of site for a small builder or self-builder, offering the chance to get their hands dirty and build their dream home, but now that it’s very difficult to get a fixed price for the build, the question is, will it slow the market?
If a self-build is to live in, a buyer could possibly be more aggressive in buying it, but everything is underpinned by the build cost.
The impact may have to be on the price of land – a developer will want to pay less for land now that build costs are higher – the logic is to buy and make a profit. In the case of a self-builder borrowing money, the lender will want to know what the final building will be worth. These are interesting times in the world of building and developing.
How much should you pay for a building plot?
Many factors will influence the price of any building plot with planning approval granted. While each plot is unique, location is always the guiding element – plots with proximity to desirable towns and cities will command a greater price than more remote plots.
Price is also dictated by how easy or difficult the plot will be to build on, taking into account factors such as the topography and access to infrastructure such as water, gas and electricity. Legal obligations such as covenants, easements or wayleaves restricting the use of the site will also affect the price.
The best way to get a realistic idea of current value is to research recent sales information in your area and find comparable sites. For a national snapshot, the national average price of a building plot with planning permission on Addland is £396,384 (sized at 1.82 acres.)
What is Right to Build?
To boost housing, the government wants to make self and custom-build easier and more popular. It introduced Right to Build legislation to help self and custom builders find a plot – which could be a self-build or a custom-build plot.
Local authorities or district councils must keep a Right to Build register of people wanting building plots and ensure they have enough sites available. Over 55,000 people have signed up to the Right to Build registers and numbers are growing, so the availability of suitable sites should increase as councils cater for the demand.
What are Custom Build schemes?
With Custom-Build homes, the buyer contracts with the builder to design and construct the home. These schemes are often set up by a developer – the plots are serviced, have planning consent granted and professionals are ready to construct the house for you.
The aim of custom-build schemes is to create well-designed houses as they allow buyers to create a new home to meet their requirements, based on pre-designed, customisable plans. Typical options include a choice of house type, internal layout and interior design alternatives. The buyer receives a house which has been plastered and painted, with services in place ready for connection.
Buying land and applying for planning permission
If you want to buy land with the aim of applying for planning approval on it to build a house, it’s important to carefully evaluate the site for constraints – these may include a Tree Preservation Order (TPO) restricting removal or alterations to trees, ecology issues such as bats rooting on site or great crested newts in watercourses. Identify these issues early on, before buying the site, and bear in mind that making a planning application may require a protected species or ecology survey from a specialist consultancy.
Other things to think about when applying for planning permission on a site include:
- It must be in a sustainable location, close to local amenities and with transport links.
- Good design is important in the planning application as a way of proving the benefits of self building.
- Construction of the property should follow green principles where possible.
Building plots for sale:
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