Your options
Option Agreement, Promotion Agreement or Outright Sale: Which Is Right for Your Land?
There are five main ways to sell land that might get planning permission. Here is how they compare on the questions landowners ask us most: who pays for planning, who carries the risk, what comes off your money, and when you know the figure.
The Five Routes Compared
Scroll sideways on a phone to see every column. Terms vary between buyers and promoters, so always compare real offers, not just the headline.
| Compare | Option agreement with us | Promotion agreement | Conditional contract | Sell now, as it is | Apply for planning yourself |
|---|---|---|---|---|---|
| Who pays for planning | We do, in full, including any appeal. | The promoter pays up front, then recovers its costs from your sale proceeds. | Usually the buyer, often only on sites already close to planning. | Nobody. No planning is sought, so the land is sold without the uplift. | You do, with no guarantee of success. |
| When your price is fixed | Before any work starts, in writing. | Not until the land is sold. | At the start, or by a formula worked out later. | Now, at today's value. | Only once you have permission and a buyer. |
| Fees and deductions taken from your money | None. | The promoter's fee, commonly a percentage, plus its planning and sale costs. | Depends on the price formula. | Selling costs. | Every pound of your planning spend. |
| If land values fall during planning | Your price is protected. It was fixed at the start. | Your share falls with the market. | Depends on the price formula. | Not applicable. | You carry the full fall. |
| Negotiation at the end | None. The price and terms are already agreed. | Sale price, costs and deductions are all settled when the land is sold. | Formula prices can be disputed. | Not applicable. | You negotiate the sale yourself. |
| If planning fails | You keep your land and owe nothing. | You keep your land. Check whether any costs are recoverable from you. | The contract falls away and you keep your land. | Not applicable. | You have spent the money and keep the land. |
| Your legal and agent fees | Contributed by us, so you can take independent advice. | Varies by promoter. | Varies. | You pay. | You pay. |
Option Agreement
Under an option agreement, a buyer pays for the planning work and has the right to buy your land if planning is granted within an agreed period. Some buyers set the price as a formula, typically a percentage of the land's market value once it has permission, less agreed costs. We do not. We agree a fixed price with you at the start, set above what your land is worth today.
That gives you three things no other route combines. You know the figure before any work begins. Nothing is deducted from it, because we pay for the planning ourselves rather than recovering it from your money. And if planning is refused, you keep your land and owe nothing.
A fixed price also makes family decisions easier. Brothers and sisters, executors and trustees can all agree to one clear number, rather than to a percentage of an unknown future sale.
Best Suited To
- Landowners who value knowing the figure in advance.
- Families who need everyone to agree to one clear number.
- Sites where planning is achievable but not straightforward, so the investment in planning is significant and someone else should carry it.
- Owners who do not want to be involved in negotiating costs, fees and a sale price years from now.
Promotion Agreement
Under a promotion agreement, a promoter pays for planning but does not buy the land. Once permission is granted, the land is marketed and sold, and the promoter recovers its costs and takes a fee, commonly a percentage of the net sale price. You receive what is left.
The figure you end up with is not known until the very end. It depends on the market when the land is sold, on what counts as a recoverable cost, and on the fee. Planning costs on a larger site can run into hundreds of thousands of pounds, and under a promotion agreement those costs come back out of the sale proceeds before your share is worked out.
Questions to Ask a Promoter
- Is there a minimum price, below which the land cannot be sold without your consent?
- Exactly which costs can be deducted, and is there a cap on them?
- Is the fee a percentage of the gross or the net sale price?
- Who decides when and to whom the land is sold, and can you refuse an offer?
- What happens to the costs already spent if the agreement ends?
Open-ended deductions are the most common reason promotion agreements disappoint. Our guide to promotion agreement fees and deductions explains each one.
Conditional Contract
A conditional contract is an agreement to buy, usually by a housebuilder, that becomes binding only if a condition is met, most often planning permission by a set date. The price is normally fixed or set by formula at the start.
Conditional contracts tend to be offered on sites where planning already looks straightforward, such as land allocated in a local plan. They are much less common on land that needs years of work through the local plan or a difficult appeal, which is exactly where most of the value is created.
Selling Now, as It Is
You can sell the land now, for close to its current-use value, perhaps with a modest premium for hope value if a buyer thinks planning may be possible.
The cost is that you give up the uplift that planning creates. Land with planning permission for housing is often worth many times its farming value, and a buyer paying today's price is buying that opportunity from you. If you do sell this way, ask for overage so that you share in any permission granted in the years after the sale. Our guide to overage explains how it works.
Applying for Planning Yourself
You can commission the surveys and submit an application yourself. If it succeeds, you then have to find a buyer and negotiate the sale. If it fails, you have spent the money and still have land without permission.
For an outline application on a field, the technical reports alone commonly run into tens of thousands of pounds, and a larger or contested scheme, with an appeal, can cost far more. Councils also look for evidence that a site will actually be delivered, which is harder to show without an experienced team behind it.
A Worked Example
To show how the routes differ, here is one imaginary 10-acre field, with figures chosen only to illustrate the mechanics. They are not a valuation of any real site.
- Value today as farmland (illustrative)
- £150,000
- Price agreed under the option
- £1,200,000
- Planning costs paid by you
- £0
- Fees or deductions from your price
- None
- You receive on completion
- £1,200,000
You know this figure before any work starts, and it is the figure you receive.
- Headline sale price with planning (illustrative)
- £1,500,000
- Less promoter's planning and sale costs recovered
- −£250,000
- Net proceeds
- £1,250,000
- Less promoter's fee at 15% of net proceeds
- −£187,500
- You receive on completion
- £1,062,500
The headline figure is not what you receive. Costs and the fee come off first, and none of these figures is known until the land is sold.
The point is not the exact numbers, which will differ for every site. It is that a headline sale price and the money in your hand can be a long way apart once costs and fees come off. With a fixed price, the number you agree is the number you get. Ask any buyer or promoter for a worked example based on realistic figures before you sign anything.
How to Choose
Four questions usually decide it:
- How much certainty do you need? If you or your family need one agreed figure, a fixed price is the simplest answer.
- Who should carry the cost and risk of planning? Planning can cost hundreds of thousands of pounds with no guarantee of success. Decide whether that should be you, deducted from your money later, or someone else entirely.
- How complicated is the planning? The harder the planning, the more valuable it is to have an experienced team fund it and carry the risk.
- How many people need to agree? Joint owners, executors and trustees find it far easier to agree a fixed figure than a percentage of an unknown future sale.
Your own land agent is the best person to help you compare real offers, and we contribute to their fees. Read option agreements explained for the terms to check in any agreement.
Questions About the Routes
Can I talk to several promoters and option buyers at once?
Yes, and your land agent may suggest it. Just avoid signing exclusivity or heads of terms with one party while you are still comparing.
Is a percentage of market value better than a fixed price?
A percentage can sound attractive, but what you receive depends on the eventual sale price, how costs are defined and the size of the fee, none of which is known when you sign. A fixed price removes all of those unknowns.
What is a typical promoter's fee?
Fees are commonly quoted as a percentage of the net sale proceeds, often in the region of 10% to 20%, plus recovery of planning costs. Always check exactly what is deducted before the percentage is applied.
Can an option or promotion agreement be ended early?
Usually only in the circumstances set out in the agreement, such as the other party failing to make progress. Your solicitor can ask for clear obligations and break rights before you sign.
Talk It Through With Us
Tell us about your land and we will explain what we could offer and how it would work for you.