Whilst the aim for developers is to remain profitable, some have moved into different use classes such as retirement homes, multifamily housing, or are focusing their portfolios on new locations. A key trend in London has been the increase in demand for the unconditional sale of development sites without planning, mentioned recently by PropertyWeek1.
Unconditional deals have always been popular due to the simplicity of the structure and the availability for the vendor to release capital quickly which gives landowners the opportunity for developers to purchase at a lower price.
Developers prefer to design and build to their own guidelines and unit type so that they can achieve maximum profit. When inheriting planning permission, developers often have to compromise on the design and occasionally go back to planning so that they can tweak layouts and sometimes resubmit plans. When buying a piece of land without planning permission it is important to check if previous permission has been applied for and not granted (and the reasons behind this) and if there are any restrictions on the use of the land or third party access ways, as this can put a hold on development.
Bespoke insurance policies which can cover future breaches of these covenants are available, and can be sought before planning is even granted. Subsequently, insurance can assist during the judicial review period, where a third party challenges the grant of planning.Read more information on Legal Indemnities insurance.