93%. That’s how many SME developers say planning delays are their biggest barrier to growth, according to the most recent Home Builders Federation survey.
We all know the story: delays, spiralling costs, and the kind of Kafkaesque circus that makes you want to bang your head against the wall. They say the system is changing, but until then, developers must still navigate it to get much-needed housing delivered.
So, the question remains – do you buy a site with planning, or without?
Buying with planning: the “oven-ready” route
Purchasing a consented site has obvious appeal. You know your costs, GDV, cashflow and funding from day one. You can break ground quickly, avoiding months of waiting while interest accumulates.
But these sites come at a price. Sellers capture the planning uplift, often with ambitious valuations, and competition is fierce. Margins get squeezed, and you may have to work within someone else’s vision for the scheme, making amendments where possible to unlock value.
Buying without planning: risk and reward
Acquiring land without consent brings the immediate headache of the planning system. Local authority processes vary wildly, timelines are unpredictable, and holding costs stack up while interest accrues. In the worst case, you can be left with a site that has little or no development value.
That said, this is where much of the profit sits today. As the saying goes, you make your money on day one. Securing full planning uplift can deliver outsized returns. Many developers over the past 18 months have chosen not to build out at all, but instead to cash in on consent and bank the gain. There’s also the upside of control – shaping the design, density and best use of the site to fit your strategy, not someone else’s.
Structuring deals: the middle ground
Between the two extremes sit option agreements and conditional contracts. These allow you to agree on a price, but only complete once planning is secured. You avoid a hefty upfront outlay and reduce risk, although you may pay a premium for the flexibility and not every landowner is willing to agree. Still, for many SMEs, this can be a smart way to build a pipeline and secure long-term value.
The bottom line
Whether you buy with or without planning depends on your capital, risk appetite, experience and financial strength. Overage agreements must also be observed, as they can eat into future uplifts regardless of how you buy.
What is clear is that with the right team around you, good advice, and a clear plan mapped out, both approaches can work.
How can Magnet Capital help?
At Magnet Capital, we give property developers the breathing space they need while planning is in the works – covering fees, site costs and keeping your project on track. And because we know things can change, we remain flexible: when new planning comes through, we can adjust the loan to match the updated scheme. That way, you don’t lose momentum while you’re waiting on permissions, and we’re ready to move with you when that stamp of approval lands.
Still waiting on planning? Let’s get the ball rolling anyway – call us on 020 8075 3255 or fill in our online form, and a member of our team will contact you shortly to discuss your development project.
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