Strategic Land Investment UK - Planning, Returns and Key Risks
Explore strategic land investment UK opportunities, including land with future development potential, planning strategies, infrastructure, development appraisals and the risks investors should assess before committing capital.
Strategic land investment UK opportunities can appeal to investors looking beyond conventional residential property and fully consented development sites.
Strategic land is generally land with potential for future development where planning, infrastructure or policy work still needs to progress before construction can begin. The investment case is therefore based on what the land could become rather than simply what it is today.
This can include agricultural land near expanding settlements, brownfield sites, land identified through planning evidence, large sites close to infrastructure improvements and land capable of forming part of a wider development allocation.
Strategic land investment can potentially create significant land value uplift, but it can also involve long holding periods, planning uncertainty and substantial professional costs.
Fraser Bond helps property owners and investors assess development opportunities, coordinate property requirements and understand the commercial considerations surrounding UK property and land.
What Is Strategic Land Investment UK?
Strategic land investment involves acquiring, controlling or investing in land where there is a credible prospect of future development.
The land may currently be used for:
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Agriculture
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Commercial purposes
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Industrial purposes
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Storage
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Open land
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Former industrial activity
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Other low-intensity uses
The investor's objective is generally to benefit from an increase in land value as planning prospects improve.
The process can involve several stages:
Existing use → planning potential → site assessment → allocation → planning application → planning permission → development or sale
Not every site will progress through all of these stages.
England's planning system is plan-led, and local plans establish the framework for addressing housing and other development needs.
Why Investors Consider Strategic Land Investment
The attraction is primarily linked to potential land value uplift.
A parcel of agricultural land can have a very different value from land capable of supporting a residential development.
The government's 2026 land-value guidance provides generic estimates for different land uses but specifically warns that individual site values can vary significantly according to plot-specific characteristics and that the figures are not market valuations.
Strategic land investors therefore need to focus on the underlying development proposition rather than assuming that planning potential automatically creates a particular return.
Potential factors include:
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Future housing demand
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Local planning policy
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Development allocations
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Infrastructure investment
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Transport improvements
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Site size
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Development density
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Local property values
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Construction costs
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Planning obligations
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Developer demand
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Exit opportunities
Agricultural Land as a Strategic Investment
Agricultural land can be considered for strategic investment where there are credible indicators of future development potential.
Potential characteristics include:
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Proximity to an expanding settlement
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Existing residential development nearby
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Good road access
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Access to public transport
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Nearby employment
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Availability of utilities
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Suitable site configuration
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Evidence of local housing demand
However, agricultural land does not become development land simply because it is near a town.
Planning authorities consider matters such as:
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Landscape
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Ecology
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Flood risk
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Highways
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Agricultural land quality
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Infrastructure
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Settlement patterns
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Local planning policy
A strategic land investment should therefore be based on planning evidence rather than speculation about future expansion.
Brownfield Strategic Land Investment
Brownfield sites can also provide strategic investment opportunities.
Examples include:
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Former industrial sites
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Vacant warehouses
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Disused commercial premises
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Redundant storage yards
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Former employment sites
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Underused urban land
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Former infrastructure sites
Brownfield land can benefit from its existing urban location and infrastructure connections, but remediation and abnormal construction costs can significantly affect the investment case.
Potential issues include:
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Contamination
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Demolition
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Ground conditions
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Drainage
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Utilities
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Highways
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Existing leases
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Structural problems
An apparently inexpensive brownfield site can therefore become expensive to develop.
Strategic Land Near Infrastructure
Infrastructure can be an important part of strategic land investment.
Investors may investigate sites near:
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Railway stations
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Major roads
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New transport corridors
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Employment centres
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Schools
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Healthcare facilities
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Regeneration projects
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Utility infrastructure
Government-backed investment is also increasingly focused on unlocking development land through infrastructure and land assembly. Homes England's 2026 investment prospectus includes products covering land assembly, strategic infrastructure and enhanced strategic land assembly for large-scale and complex development.
Infrastructure does not guarantee that a particular site will receive planning permission, but it can influence the long-term development context.
Strategic Land and Local Planning
Understanding local planning policy is central to strategic land investment.
Investors should examine:
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Adopted local plans
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Emerging local plans
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Strategic policies
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Housing requirements
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Site allocations
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Housing land assessments
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Brownfield registers
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Infrastructure strategies
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Call-for-sites submissions
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Planning applications
The planning system in England changed significantly in 2026, with the new local plan-making system coming into force from 25 March 2026 while transitional arrangements allow both legacy and new systems to operate during 2026.
This means investors should establish which planning system and policy documents apply to the particular authority before making assumptions about a site's prospects.
Strategic Land Allocations
A site allocation can be an important milestone in the development process.
An allocation indicates that the planning authority has identified a site for a particular development purpose within its planning framework.
However, allocation is not the same as planning permission.
A site may still require:
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Detailed planning applications
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Technical assessments
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Highways approval
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Environmental mitigation
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Infrastructure
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Planning obligations
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Design development
Investors should therefore distinguish between land that is merely being promoted, land under consideration, allocated land and land with implementable planning permission.
Call-for-Sites Opportunities
Call-for-sites exercises can help investors identify land being put forward for potential development.
Landowners may submit sites for consideration during local plan preparation.
However, a submission does not mean that the authority has accepted the site.
Government guidance explains that sites identified during the site-identification process still need to be assessed before they can be selected for allocation.
For investors, call-for-sites information can therefore be useful as an early research tool rather than evidence of guaranteed development.
Strategic Land Promotion
Some strategic land investments use a promotion agreement rather than an outright development purchase.
Under this structure, a promoter can work with the landowner to pursue planning permission and then market the land to developers.
The promoter may coordinate:
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Planning consultants
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Architects
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Engineers
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Environmental consultants
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Highways specialists
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Planning applications
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Technical surveys
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Developer marketing
The landowner and promoter then divide the sale proceeds according to the agreed contractual structure.
A promotion agreement should be reviewed by a specialist solicitor because the treatment of costs, planning control, sale strategy and proceeds can vary significantly.
Strategic Land Option Agreements
Another possible structure is an option agreement.
An option can give a developer or investor the contractual right to acquire land under specified conditions.
The commercial arrangement can differ considerably from a promotion agreement.
For a landowner, important points can include:
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Option period
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Purchase price mechanism
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Extension rights
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Planning obligations
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Costs
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Developer control
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Assignment rights
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Exit provisions
The appropriate structure depends on the land and the commercial objectives of the parties.
How to Find Strategic Land Investment UK Opportunities
Investors can develop a strategic land pipeline by combining planning research with property market analysis.
Review Local Plans
Start with the relevant local authority.
Look for:
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Strategic policies
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Housing targets
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Site allocations
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Growth areas
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Settlement boundaries
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Infrastructure plans
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Brownfield opportunities
The Planning Inspectorate maintains information on the progress of plans containing strategic policies across England, which can help investors understand the status of planning documents.
Search Planning Applications
Nearby planning applications can reveal how development is progressing around a potential site.
Look for:
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Large residential schemes
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Employment developments
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Mixed-use projects
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Infrastructure applications
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New schools
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Transport improvements
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Applications on adjoining land
Planning activity nearby does not guarantee the same outcome for another site, but it can provide useful evidence about the wider development environment.
Investigate Land Ownership
Large strategic sites may involve several landowners.
Where adjoining parcels can be assembled, a larger development opportunity may sometimes become more commercially viable.
Land assembly can therefore form an important part of strategic land investment.
Strategic Land Investment and Development Appraisal
Investors should calculate potential development value before committing capital.
A simplified appraisal can consider:
Gross Development Value - development costs - infrastructure - planning costs - finance - professional fees - planning obligations - developer return = residual land value
Gross Development Value represents the estimated revenue from the completed development.
For a residential scheme, this could involve:
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Number of homes
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Housing mix
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Expected selling prices
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Affordable housing
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Sales rates
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Market demand
The residual value is then considered against the price required to acquire or control the land.
Illustrative Strategic Land Investment Example
Consider a hypothetical site where an investor believes a future residential scheme could accommodate 100 homes.
Assume:
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Average completed sale value: £350,000
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Illustrative GDV: £35 million
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Construction and infrastructure: £19 million
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Professional and planning costs: £1.8 million
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Finance and holding costs: £1.5 million
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Planning obligations and other costs: £2 million
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Contingency: £1 million
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Developer return: £4 million
The illustrative residual amount would be approximately £5.7 million.
That figure is not automatically the site's market value or the investor's profit.
The actual land value would depend on the probability of achieving planning permission, development density, site-specific costs, market conditions, infrastructure requirements and the developer's required return.
Government appraisal guidance uses residual valuation principles for assessing land value after accounting for development costs and an appropriate return.
Strategic Land Investment Holding Periods
Strategic land can require considerably more patience than conventional property investment.
Planning processes can take years, particularly where:
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A local plan is still emerging
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Infrastructure is required
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Multiple landowners are involved
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Technical constraints are significant
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The site needs an allocation
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Environmental issues need to be addressed
An investor should therefore assess whether the expected return justifies the length of time capital could remain tied up.
The investment should not be assessed solely on the potential percentage increase in land value.
Strategic Land Investment Risks
Potential risks include:
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Planning refusal
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Delayed planning allocations
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Changes to local planning policy
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Infrastructure delays
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Highways constraints
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Flood risk
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Ecology
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Biodiversity requirements
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Contamination
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Abnormal construction costs
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Falling property prices
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Rising construction costs
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Weak developer demand
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Long holding periods
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Increasing professional fees
There is also the risk that the site achieves planning permission for fewer homes than initially expected.
A strategic land appraisal should therefore consider multiple development scenarios rather than relying on a single optimistic outcome.
Strategic Land Investment in London
London provides a different strategic land environment from many parts of England because of its high land values, complex planning framework and strong focus on housing delivery and sustainable development.
Potential opportunities can include:
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Brownfield redevelopment
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Large urban sites
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Underused commercial land
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Industrial land suitable for redevelopment
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Transport-linked sites
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Regeneration areas
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Land forming part of larger development schemes
London's strategic planning framework can influence development opportunities across borough boundaries and major growth areas.
However, London land can also involve substantial acquisition, construction and planning costs.
Strategic Land Investment Outside London
Investors can also investigate strategic land around major UK cities and growing towns.
Potential locations include:
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Manchester
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Birmingham
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Bristol
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Leeds
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Liverpool
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Nottingham
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Sheffield
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Cambridge
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Oxford
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Reading
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Milton Keynes
Each market requires a separate assessment of:
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Land values
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Housing demand
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Local planning policy
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Development density
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Construction costs
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Infrastructure
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Developer demand
Generic land-value figures should not be substituted for a site-specific valuation. Government guidance specifically states that its published generic land values are for policy appraisal rather than individual market valuations.
Strategic Land Investment and Exit Strategies
An investor should consider the exit strategy before acquiring strategic land.
Potential exits can include:
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Selling after planning allocation
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Selling after planning permission
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Selling to a housebuilder
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Selling to a developer
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Entering a promotion agreement
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Entering an option agreement
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Joint venture development
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Retaining the land and developing it
The appropriate exit depends on the investor's capital position, risk tolerance, planning prospects and development expertise.
Questions to Ask Before Investing in Strategic Land
Before committing capital to strategic land investment UK opportunities, investors should ask:
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What is the land's current lawful use?
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What planning policies apply?
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Is the site allocated for development?
