Many of the auction lots that I visited for ‘Homes Under The Hammer’ are plots of land – with a whole range of possibilities for redevelopment for the lucky buyer. There is also a strong case for buying undeveloped land as an investment – with the hope that by gaining permission to develop the plot at some point, the value of the land increases significantly. So, what should you be looking for if you do decide to buy land?

Ground Conditions

One of the first considerations is the condition of the ground itself as this will directly affect effect the suitability of the plot for what you intend to do.

For example, the soil type may require a large amount of work to create the foundations for building on. Similarly, If the land lies on a slope it may require more labour and materials to put solid foundations in place, and worse still, the land could be situated on a flood plain. Your solicitor should carry out necessary checks for this on your behalf and you should ensure that any additional work required is budgeted for.

Land that is ‘Brownfield’ land will have had a previous use and in some cases the this could have caused the land to become contaminated through use of chemicals, industrial pollution or infill. If there is any question about the quality of soil, a sample should be collected and tested.

The plot

How do you access the land? Does the access point cross land not belonging to you? Some vendors hold back a strip of land between the access point and your land. This is known as a ransom strip - the owner of the strip can prevent you accessing the land and hold you to ransom. A solicitor will check for this.

If the access is via a private drive you will be responsible for maintaining it. This may be shared with other users of the drive but an annual budget should be allocated for maintenance.

The plot size and shape should be checked - the area of the plot may provide the land required, but an awkward shape can quickly end plans you might have.

Services

Before you buy land for building on find out if services are connected or whether it is near to existing services for connection. Buying land without nearby services may mean that their connection is not physically possible or is financially demanding.

Planning

If the land has planning permission, look over the plans and see that it tallies with what you hope to build. If not speak to the local council for an informal decision. It is possible to reapply for planning permission without affecting the planning permission that has already been gained, so all will not be lost.

Do make sure that the planning permission has not expired, and will not expire within the time of the transaction and the time it will take to get started. Your solicitor will also check for this. The checks should also cover previous planning applications so you can see what has been applied for and succeeded or failed in the past.

How much to pay?

The value of a particular plot is also dependent on other factors:

·                 The topography of the land: Sloping foothill land is inefficient for farming but desirable for high-priced homes with attractive views.

·                 The costs of building: Will the property require expensive foundations on an “infill” site or if it is on a hill. If the house is remote, will the services be expensive to connect?

·                 Timing: Shrewd investors will follow the lie of the land and know when to buy and how long to hold onto the land to realize its full potential. The ‘holding’ period may involve cash expenditures for mortgage payments, property taxes and improvements to the land. Unless the property can be leased for some income-generating activity, vacant land requires constant financial support during its investment life.

·                 Utility Services: The future value of self build land often depends greatly on the availability of gas, electricity and sewer services.

·                 Value of the finished home: Carry out research via local estate agents and Internet sites to fin out  what sale price a newly built home can command.

However, it’s not all bricks and mortar as parcels of land suitable for pony paddocks, agricultural investment, woodland or recreational purposes are all commanding high premiums. As Mark Twain one famously said, “Buy land; they don’t make it anymore.”

For more information on this topic, please visit the site store to order your SIGNED copy of Martin's book, 'Teach Yourself: Making Money From Property' available for just £9.99 plus P+P.

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