With the solicitors working away to get our deal concluded, let’s talk about the costs of getting this deal through planning.
Solicitor Fees: £2,500
To sweeten the deal for the other side, we have agreed to pay a contribution of £2,500 on their legal fees. Legal costs can escalate if left unchecked, so we would only suggest a contribution to legal fees, rather than covering them entirely. That way, it ensures the landowner is prudent when appointing a solicitor and considers the costs involved, as opposed to having a blank cheque.
Site measure/topography survey of the site: £1,200
Architect to draw up initial Class Q application for eight units, over 1000m2: £6,000
Planning consultant to make initial application: £1,750
Traffic management survey/report: £1,250
Local authority Class Q application fee: £328
Phase 1 costs covering the Class Q application: £15,528
Pre-App / Full Plans application after securing Class Q
Local authority Pre-App fee: £1,150
Planning Consultant Pre-App Fee: £3,000
Architects Pre App fee: £1,500
Planning consultant full plans application: £2,000
Architects full plans application: £6,000
Local Authority Fee: £3,450
Ecology report: £1,500
Bio-Diversity report: £1,500
Bat Surveys: £3,500
Phase 2 costs covering full plans application: £23,600
As detailed above, the two phases will cost a minimum of £39,000.
However, the above makes no allowance for any additional reports required, which in this case could be structural engineers’ reports (due to the Class Q application on the existing barns), design changes required requiring additional work from the architect, or just simply getting a refusal where we have to pay the planning fee again, planning consultants again, and so on.
It’s safe to say the best case for getting this site through planning will be around £50,000.
The £900k figure agreed upon, with a reasonable upside of £1.1m, gives us £150k profit after accounting for the planning fees. We wouldn’t want to work on anything less than this.
Based on these costs above, it’s essential to hold firm when people ask for an option fee, which on a deal of this size would likely be £10,000. The costs to take the scheme through planning are already significant, so it is best not to add on to this with hefty option fees. We would always hold firm on securing using a nominal £1.
I expect the solicitors to take 6 – 8 weeks to agree on the paperwork. It’s a simple agreement, so it doesn’t need to be complicated, although these things can drag on if allowed to.
Over the next few weeks, whilst the solicitors get the paperwork done, we’ll share tips on how to find deals, what to look for, and the steps to take.