Following the slump in the residential property market, and potential sellers deciding to stay put and add value or expand, there appears to be an upsurge in the number of private land sales taking place. David Powell, Managing Director of Powells Chartered Surveyors, confirms that there has been an increase in instructions from clients wishing to sell or acquire land privately ‘off the market’, usually between neighbouring or local purchasers.
As land values hold firm in the economic downturn and less open market transactions are available, a number of land owners are acquiring adjacent land to add value to their property, or selling off parcels of land to release capital. Selling land in a private deal has long been common place between ‘special purchasers’, such as neighbours.
David explains “A special purchaser is someone who is likely to pay more than the typical ‘Market Value’ for a property as they often gain an additional premium (known as ‘Marriage Value’) by acquiring it”. This could range from the sale of a slither of land to acquiring the neighbouring farm to consolidate an existing holding. In either case, David Powell warns a number of implications will affect the value of the retained property.
Where private land sales are negotiated off the market, between potential vendor/seller, David warns that while the sale acquisition of land to a neighbour may attract a premium, what initially seemed an attractive price may disappoint later on if the full effects of any sale on the value of the retained property are not fully considered.
David explains the sale of land privately is often more complicated as vendors/purchasers need to consider issues such as access and rights of way, potential third party uses, diminution in value of any retained property in addition to taxation liability. He adds “We advise a large number of sellers and purchasers of private land sales and our service often adds value from negotiating the price and sale provisions in favour of the client, to protect the client’s current and future interests”. We also ensure any negative effects on value are fully considered and if possible mitigated.
David recently handled a private sale of a commercial block of Grade III agricultural land which involved providing detailed valuation advice, private marketing to individuals registered on our applicant database and negotiating favourable terms on behalf of the vendor. This also included retaining the shooting rights across the land and a right of access to other retained land.
It is essential that issues such as boundary ownership and maintenance are properly addressed during the sale process and also that an accurate and Land Registry compliant conveyance plan is produced and agreed by both parties as boundary disagreements at a later stage are all too common.
David recommends anyone looking to undertake a private sale seeks professional advice at an early stage and that sale terms are formally documented as ‘Agreed Heads of Terms’ along with both parties agreeing the conveyance plan prior to instruction of solicitors. Seeking professional advice at an early stage of any potential sale or acquisition can be invaluable in maximising the disposal or investment and ensuring a smooth transaction.
For further information on the sale or purchase of any land or rural property, or to register your details on our applicants database, please contact David Powell at Powells Chartered Surveyors – 01600 714140 or email firstname.lastname@example.org