Scala Land Group - Land Investment Guide
If you’re thinking of investing in land in the UK there are several aspects you should consider.
Let’s deal with the easiest scenario first. If you’re considering buying farmland and keeping it as farmland, you need to look at capital growth – on agricultural land it has been strong over the last few years. You must also look at other returns on the land, either from farming it yourself, or through letting it. That’s beyond the scope of this web page, but a good place to start would be by talking to one or more specialist land and farming agents in the area.
If you don’t want to invest in many hectares of farmland for farming, and would prefer a smaller investment, or a spread of investments, you can buy smaller plots of greenfield land from Scala. You do this with the aim that you might gain planning permission to build on some or all of your land, and thus potentially making a handsome capital gain. In that case, here’s a brief summary of aspects you should consider:
1. Is the land located where development would be considered as sustainable? Factors to consider include:
- Easy connection to mains water, mains sewage, electricity and gas
- Are there local public transport services, adequate local road capacities, ease of access to transport hubs and major roads?
- How close are schools, shops, healthcare, recreation and leisure facilities?
• Is the site in proximity to employment centres?
2. Is the land actually suitable for residential development? There are dozens of factors which can influence this decision. Chief amongst them are items like flood risk, contamination, rights of way, whether pipelines pass under, or cables pass over the land, whether mineral rights have been awarded, is there a risk of landslip or subsidence: the list sometimes seems endless.
3. A land investor should check whether there are any barriers to achieving residential planning permission. Factors might include if it is part of the local development plan, sites of special scientific interest, areas of outstanding natural beauty, land already designated for other purposes, tree preservation orders, proximity to pollution sources, and more.
Only when you are satisfied on all these topics should you consider investing in a piece of land. Luckily, if you are buying land through Scala, we will already have assessed the land against all those criteria, and more, before offering it to you.
When considering brownfield land you should investigate the likelihood of getting a planning ‘change of use’ approved, the costs of security, demolition and clearance, the possibility that the land may be contaminated and need remediation, and the marketability of the site when it is ready to be resold. Our key advice would be to seek advice from one, or more, specialist brownfield surveyors before taking even a preliminary decision to invest.
There’s no doubt the current situation, where there is increasing demand for land for both building and farming and supply is restricted, means that prices should potentially increase for the careful investor. But above all, we’d advise very careful research on your own part – and those of your advisers – before making a decision.
Tel: 020 7965 4747
