News & Articles
Buying Land
Before you buy land make sure you know your options;
If you are considering investing in land, you will need to give some thought at some point to the method you will employ to buy land. Investment land sold as part of a land development project, (a form of land investment whose popularity has grown exponentially in recent years), will not be considered. This is because this form of land investment is not one of the traditional means of buying land.
Investment land on a land development project is usually sold, for instance, at a fixed price which is not the case when buying land in the conventional sense. What this article will therefore cover is those conventional means of buying land; as such it will be of interest to people considering self-build land investment, speculative land investment and anyone who is curious as to the way in which UK land changes hands.
UK land is in many cases bought through auction houses. Members of the public can submit bids to buy land by phone or in person and the owner of the land for sale can set a reserve price for their UK land if they wish. Those with land for sale often prefer selling UK land via auction as there is usually a high chance of a sale. (Remember that if you are considering buying land from an auction, they do not usually run year-round).
For institutions with land for sale, auctions are effective in cases where they need to demonstrate (eg to shareholders or treasurers) that they have sold a given piece of UK land at fair market value. Auction houses do however only account for around one third of all land for sale: for those buying land the most likely method will be through a ‘private treaty’.
A private treaty in respect of land for sale entails a piece of UK land being marketed for a period of time. ‘Expressions of Interest’ are invited from those looking to buy land and visits to the UK land site can be arranged. After this period has elapsed, those seriously considering buying land are requested to submit ‘best and final bids’ which are sealed. In some cases those with land for sale, having identified the individuals who are serious about buying land, will enter a negotiation process. This form of UK land sale accounts for over half of all land for sale.
A third way of buying land is through a process known as ‘informal tender’. UK land agents are engaged to market the land for sale. A date will be set by which bids must be submitted but bids to buy land are registered immediately. This means that those bidding to buy land can be invited to raise their bids if a higher bid for the UK land site has been received. It is however, not particularly common to buy land in this way.
An even rarer method of buying land is the ‘formal tender’ approach. This is generally the preserve of institutions – as opposed to private individuals - when buying UK land (or selling UK land). This is because as well as submitting formal bids to the owner of the land for sale, those interested in buying land must immediately make legal and financial preparations to complete the purchase. Acceptance of the best bid for the UK land site triggers the exchange of contracts (and the bankers’ draft of the winning bidder is accepted).
The various methods of buying land described above represent the most common with respect to UK land. Naturally, the method most suited to you will depend on what type of land you are buying eg UK land for a self build land investment, UK land for grazing animals on etc. In every case, it is essential you engage the services of a qualified land lawyer: UK land law is even more complex than property law. Few people would choose to buy a property without legal assistance, and nor should you when buying land.
If you are considering investing in land, you will need to give some thought at some point to the method you will employ to buy land. Investment land sold as part of a land development project, (a form of land investment whose popularity has grown exponentially in recent years), will not be considered. This is because this form of land investment is not one of the traditional means of buying land.
Investment land on a land development project is usually sold, for instance, at a fixed price which is not the case when buying land in the conventional sense. What this article will therefore cover is those conventional means of buying land; as such it will be of interest to people considering self-build land investment, speculative land investment and anyone who is curious as to the way in which UK land changes hands.
UK land is in many cases bought through auction houses. Members of the public can submit bids to buy land by phone or in person and the owner of the land for sale can set a reserve price for their UK land if they wish. Those with land for sale often prefer selling UK land via auction as there is usually a high chance of a sale. (Remember that if you are considering buying land from an auction, they do not usually run year-round).
For institutions with land for sale, auctions are effective in cases where they need to demonstrate (eg to shareholders or treasurers) that they have sold a given piece of UK land at fair market value. Auction houses do however only account for around one third of all land for sale: for those buying land the most likely method will be through a ‘private treaty’.
A private treaty in respect of land for sale entails a piece of UK land being marketed for a period of time. ‘Expressions of Interest’ are invited from those looking to buy land and visits to the UK land site can be arranged. After this period has elapsed, those seriously considering buying land are requested to submit ‘best and final bids’ which are sealed. In some cases those with land for sale, having identified the individuals who are serious about buying land, will enter a negotiation process. This form of UK land sale accounts for over half of all land for sale.
A third way of buying land is through a process known as ‘informal tender’. UK land agents are engaged to market the land for sale. A date will be set by which bids must be submitted but bids to buy land are registered immediately. This means that those bidding to buy land can be invited to raise their bids if a higher bid for the UK land site has been received. It is however, not particularly common to buy land in this way.
An even rarer method of buying land is the ‘formal tender’ approach. This is generally the preserve of institutions – as opposed to private individuals - when buying UK land (or selling UK land). This is because as well as submitting formal bids to the owner of the land for sale, those interested in buying land must immediately make legal and financial preparations to complete the purchase. Acceptance of the best bid for the UK land site triggers the exchange of contracts (and the bankers’ draft of the winning bidder is accepted).
The various methods of buying land described above represent the most common with respect to UK land. Naturally, the method most suited to you will depend on what type of land you are buying eg UK land for a self build land investment, UK land for grazing animals on etc. In every case, it is essential you engage the services of a qualified land lawyer: UK land law is even more complex than property law. Few people would choose to buy a property without legal assistance, and nor should you when buying land.