How to buy land – not bricks!
If you have always dreamt of building your own house, then you know that one of the first steps into making that dream a reality is buying the land on which your home will stand. But this can be a daunting task, as there are a lot of factors that you may not realise you need to consider before you look into it seriously. Therefore it is advisable that you instruct solicitors as they will generally consider all of these issues for you, which takes the headache away from you, but it is a good idea that you are also clued up on these so that you can avoid buying a nightmare plot.
The good news is that purchasing land is generally simpler than buying property, but there are some things you should be aware of before you venture out searching for your perfect plot;
1. Have a clear idea in mind as to why you are buying the plot.
Depending on what your plan is, it will help to determine when and where to buy.
2. Make sure you are aware of the different types of land on the market.
There are two main categories green belt and brown belt land, to learn more about what this actually means please read our blog “which land is the right land?”
3. Research well
As with any purchase, you make it is a good idea to spend a good amount of time researching the market so that you will understand what is reasonable to pay for your plot.
4. Again, with any purchase don’t just buy the first plot that you like!
Shop around to ensure you are certain on the plot you decide to go for. There are always a lot of options on the market and different ways of finding what’s out there, make sure you check land auctions, specialist land agents, and whether any landowners are happy to sell a patch of land on the corner of their property.
5. It is a good idea to focus your search to areas with potential for growth.
The same principle applies to buying land as it does to buying property, you want to be happy with the area in which you are going to live. The area is also important in terms of considering transport links and local amenities and schools etc.
6. Planning permission is an important consideration.
Some plots will be sold with planning permission, but this may not cover all that you want to build. Planning issues can be quite complicated and so it is best to instruct a solicitor to help you navigate through these issues. It is also important to note that planning permission will be your responsibility and that when dealing with the local authority to apply for this it can be a lengthy process so make sure you get your application in, in plenty of time!
7. Make sure you get a proper survey carried out on the land!
It may not seem necessary but there can be hidden hurdles such as flood risks, overhead power lines and boundaries.
8. Speaking of boundaries make sure you know 100% where your plot begins and ends!
For some people having a development next to their house brings out a bad side to them as it can be frustrating being the neighbour of a building site. This is why it is a good idea to be clear about the boundaries from the outset, and make sure your neighbours understand your understanding of the boundaries to avoid future conflict.
9. Another important consideration is rights of way and access.
When you are in the construction stage you need to be clear on how you will access the land, especially if you will be having lots of hefty vehicles needing to get access to bring construction materials etc.
10. Remember that this purchase is likely to be a long term investment for you.
Take your time to do everything properly, you will be glad when you reap the profits in the future if you go onto sell, or even knowing how much value you have added from your purchase price is very satisfying.
11. Hunt down the right solicitor to help you navigate through your purchase so that it runs as smoothly as possible.
The process of purchasing land will largely follow the same steps as buying a property, but there are a few extra considerations that are specifically relevant to the purchase of land transactions. Once you have found the solicitor who you will be instructing to guide you through the process, there is a specific structure that it will follow, it is a good idea to have an idea of this structure so that you know what you are getting yourself in for and make sure that your expectations are reasonable.
- Step 1
The buyer’s solicitor will contact the seller’s solicitor and request to see the information pack about the property, but as this is the purchase of land, the seller will not normally provide this as it is not really relevant for land. Instead, the buyer’s solicitor in this circumstance will raise enquiries regarding the land. These enquiries will mostly deal with the points mentioned above. You should also receive a contract and a copy of the deeds, and sometimes it is a good idea to wait until these have been received before raising these enquiries.
- Step 2
The only thing extra that your solicitor will need before they can move on is a copy of your mortgage offer if this is applicable, otherwise, you can move onto step three.
Your solicitor will be looking out for in the title deeds, any restrictive covenants that may limit how many properties can be built on the land, any rights of way on the land, and importantly if the seller has the right to sell what they are selling to you.
- Step 3
Your solicitor will go through the documents with you and point out and explain any issues that arise from them. Once you are satisfied with the contract, this can be signed and your deposit paid and then the contracts can be exchanged. But before this stage, your solicitor may visit the site themselves to check for any particular issues. Further, as added protection, it is quite normal for contracts to be exchanged on the condition that satisfactory planning consent being received. This way you have the ability to back out, even though contracts have been exchanged, if you do not get planning consent or at least do not get the full consent you applied for. This type of exchange is commonly known as Subject to Planning Exchange.
- Step 4
Once both parties are ready, a completion date will be fixed. On this day, the buyers solicitor will hand over the rest of the purchase money, in return for receiving the transfer document and title deeds from the sellers solicitor.
- Step 5
The buyer’s solicitor then has the responsibility to arrange for the paying of stamp duty within 14 days, as well as arranging for the application to the land registry to register the new ownership within two months.
Overall, the transaction of buying land follows a very similar structure to the transaction to purchase a property and has some of the same technicalities, as well as its own specific considerations that can be quite complicated. Therefore it is best practice to instruct a good solicitor to guide you through this process, to get you on the road to building your dream home, in your dream plot!
Disclaimer – our articles are designed to give you guidance and information. There is no substitute for proper direct advice, particularly as everyone’s circumstances are different. If anything in this article may affect you, please contact us for advice that is specific to your circumstances.