Edge of Town. Edge of Dreams.
|
|
Edge of Town. Edge of Dreams.
|
Urban sprawl doesn’t creep. It marches. Green fields eventually get swallowed by demand. And for developers and landowners with guts, the perimeter of existing settlement areas is ground zero for one of the riskiest — but potentially most rewarding — plays in UK property. |
You’ve probably heard terms like promotion agreement, strategic land, or planning consent. These all tie together when someone (developer/promoter) gets land off the local farmer, then takes the site through the planning maze, whilst trying to turn it into something lucrative. The prize? A huge uplift in land value. The catch? It takes time, money, patience and legal/ planning smarts. |
Here are two examples to ground the idea: |
|
|
|
Example 1: Edge of Town Expansion
A chunk of greenbelt, just outside the existing built-area. No guarantee the council will let you build there, but the pressure for housing pushes them. If you can secure planning permission, that land becomes gold. If not… well, you’re stuck with fields. |
|
Example 2: Edge of Town Pocket
A “pocket” of land at the edge of town. What was a field for grazing animals was developed into 40 properties. One sharp deal here could change your financial life. But you’ll be swimming upstream — planning objections, local policy, community resistance, ecology, infrastructure, etc. |
|
The Strategy Behind the Strategy
|
Here’s how this works in practice, what makes it tick — and what makes most people bail. |
What is a Promotion / Land Promotion / Planning Promotion Agreement (PPA)
|
- Legal deal: landowner + promoter (or developer/promoter). The promoter covers the costs, does the risk-heavy work (planning, technical studies, consultations etc.), and then once permission is granted, the land is sold to a housebuilder (or sometimes developed by the promoter). The profits (after costs) get split per agreed terms.
- Timing & scale: often 5-10 years. Some parts can take even longer if greenbelt changes, Local Plan reviews, appeals etc.
- No upfront cost to landowner: The promoter bears financial burden up to planning consent (studies, legal, infrastructure design, public consultations etc.). If the permission falls through by agreed deadlines, usually the promoter eats the costs.
|
How Sites are Found and Chosen
|
Promoters / developers are always scanning for: |
- Land just outside or at edge of built-up areas. Proximity to existing infrastructure is huge.
- Greenbelt / fringe greenfield sites that might be reallocated via Local Plan or through appeal. Sites with fewer environmental, topographical, or access constraints are better.
- Policy signals: local councils that are expanding or renewing Local Plans, politics favouring more housing, areas under pressure for housing supply. Also, whether the Local Plan has a review, or the greenbelt boundary is under scrutiny.
|
What’s Involved: The Long, Twisty Road
|
- Due diligence & baseline work
- Topography, flood risk, ecology, heritage issues.
- Transport/road access, utilities.
- Local planning policies, greenbelt constraints, political appetite.
- Planning strategy & proposal
- Decide whether to push via outline planning permission, reserved matters, or wait for Local Plan allocation.
- Community engagement, technical reports (noise, air, landscape, etc.).
- Negotiations and obstacles
- Local objections, environmental concerns, consultations.
- Potential appeals if planning is refused.
- Section 106 / s106 obligations (developer contributions for infrastructure, schools, roads), conditions, sometimes even compensations.
- Sale or development
- Once planning permission is secured, either the promoter sells to a homebuilder, or, in some cases, the promoter builds / develops.
- Infrastructure servicing, roads, utilities etc. may need to be in place to make land appealing.
- Profit split and risk sharing
- Costs deducted, risk shared. Landowner gets a chunk; promoter/developer gets a chunk. The % depends heavily on risk, complexity, how tough planning is.
|
Returns & Margins
|
- Land value before planning permission (agricultural or non-developed land) is typically low. Once planning permission is granted, value skyrockets. The uplift (difference between “green field” / agricultural use value and “permissioned residential / mixed-use” value) can be many multiples.
- Because the promoter is doing all the risky work, they demand a share of that uplift. Landowners usually get much more than just selling raw land outright, but less than if they had secured planning themselves.
- Exact numbers depend: how many homes, how attractive the location, how controversial the site is (ecology, greenbelt). Deals might see landowner getting 70-80% of the uplift after costs, or possibly less if the promoter takes on more risk. (These are illustrative; deals vary wildly.)
|
Risks, Delays & Things That Can Go Wrong
|
- Planning refusal or rejection by council. Appeals take time, often expensive.
- Local opposition / environmental or heritage objections.
- Changes in policy: greenbelt protections may tighten; Local Plans may shift.
- Cost overruns in the technical, legal, or infrastructure work.
- Time: money tied up for years. Cashflow is slow unless the promoter has deep pockets.
- Legal complexity: agreements must be well drafted (especially around cost deductions, responsibilities, timing, what happens if planning permission fails).
|
Rewards (if it works)
|
- Huge payoff on land that was nearly worthless in its raw state (agricultural value).
- For landowners: big capital gain without fronting huge costs or doing the planning work themselves.
- For promoters / developers: if site scales, the returns can be very high. Also, establishes credibility and pipelines of land supply.
|
|
The Takeaway
|
If you’re a developer, promoter, or landowner sitting on land just outside current urban areas: |
- Keep eyes on council Local Plan reviews. Greenbelt boundaries might shift.
- Understand that success is rarely fast. You need deep pockets (or a partner who has them), patience, legal/ planning firepower.
- Structure the promotion agreement super carefully: clarity on cost shares, timings, responsibilities, what counts as cost, what happens if planning fails, how the sale happens etc.
- Be ready for opposition. You’ll need community engagement, environmental studies, perhaps infrastructure promises.
|
|
TL;DR
|
Greenbelt fringe land + promotion agreement = high risk + high reward. One mis-step in planning, and they kill your deal. But get it right, and land that was once fields generates returns that can change your financial future. |