The Four Ways to Sell Land for Development, Compared Side by Side

A field with a chance of planning permission can be sold in four recognised ways. The Royal Institution of Chartered Surveyors, the professional body for land agents and valuers, published a professional standard called Land agreements for development purposes, and its Land Journal summary of December 2025 lists six approaches the standard looks at in detail. Three of them are ways of agreeing a sale before planning is granted: the conditional contract, the option and the promotion agreement. A fourth, the hybrid, mixes an option with a promotion. The other two, a right of pre-emption and overage, are rights attached to a sale rather than ways of making one. The last of the four routes is the oldest and simplest: an outright sale of the land as it stands.

• An outright sale now. You sell the land in its present use, by private agreement or at auction, and the buyer takes on any planning prospect along with it.
• A conditional contract. You and a buyer sign a binding contract today, and it completes only if a condition, usually a satisfactory planning permission, is met.
• An option agreement. You grant a buyer the right, but not the duty, to buy your land once planning has been secured, on terms written down at the start.
• A promotion agreement. You appoint a promoter to get planning permission. Once it is granted, the land is sold on the open market and the promoter is paid out of the proceeds.

Each one is a different legal animal, with its own rules on how it is made binding, how it is protected and how it ends. This guide takes them in turn, then puts all four in one table. It explains the mechanics; the commercial terms of any real agreement are set out in the document itself.

A deal for land is binding only once it is in writing and signed. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires that a contract to sell land, or to grant any other interest in it, can only be made in writing. Every term the two sides have expressly agreed has to be in the signed paperwork, and both of them, or someone acting for each, must sign.

That rule explains a good deal about how land deals feel from the inside. A handshake, a phone call or an email saying "we have a deal" does not bind anyone, which is why the heads of terms, the short summary agreed before drafting, are marked subject to contract. Nothing is fixed until the formal document is signed. It also explains why every term has to go in: a term agreed but left out of the signed document can put the whole contract at risk.

The Exception for Auctions

The same section lists three cases it does not apply to, and one matters here: a contract made in the course of a public auction. At an auction the contract is formed in the room, or online, when the auctioneer accepts the winning bid, not weeks later at an exchange of contracts. The auction conditions then set out the paperwork that follows.

An outright sale is the land changing hands now, at a price set by what it is worth today. That price reflects its present use, as farmland, paddock or yard, plus whatever a buyer will pay for the chance of planning one day, which is called hope value. Our guide to how the price for your land is worked out explains those values. Once the sale completes, the land, its planning prospects and its risks all belong to the buyer.

By Private Treaty

Most land is sold by private treaty: an agent markets it, offers come in, one is accepted subject to contract, and the solicitors work towards exchange and completion. Until contracts are exchanged, either side can still withdraw, because of the writing rule in the 1989 Act.

At Auction

Land is also sold at auction, and the rules are quite different. Where an auction uses the fifth edition of the RICS Common Auction Conditions, a successful bid is one the auctioneer accepts. The buyer must then give the auctioneer the details needed for the sale memorandum, sign it and pay the deposit; if the buyer will not sign, the auctioneer is authorised to sign on the buyer's behalf. A buyer who fails to do these things can be treated as having walked away from the contract, the lot can be offered again, and the seller may have a claim against that buyer. The deposit is by default the greater of 10% of the price or £5,000, or the whole price if that is less. Unless the special conditions set another date, completion falls 20 business days after the contract date.

Auction gives a fixed timetable and a sale that is binding from the moment the bid is accepted. Because the contract is made on the day, bidders need to have read the conditions and the documents about the land beforehand, which is why the paperwork is prepared before the auction rather than after it.

Keeping a Share of Future Planning

Some owners selling outright write in an overage, a promise by the buyer to pay an extra sum if planning is later granted. The planning itself then sits entirely with the buyer, who decides whether and when to pursue it. Our guide to overage explains how it is drafted and how long it lasts.

A conditional contract is a binding contract for the sale of your land that completes only once one or more conditions are met. The usual condition is a satisfactory planning permission. Abdi Ebrahimi of Harper James, a law firm, explains in a guide updated in March 2025 that the buyer is legally bound to complete the sale if and when the conditions are fulfilled, and cannot back out at that point.

• Who runs the planning. Usually the buyer, at its own cost. The RICS summary describes the developer as normally responsible for obtaining planning permission under a conditional contract.
• The price. Written into the contract, as a fixed sum or as a price mechanism. RICS says the contract sum payable once planning has been granted and the other conditions fulfilled must be defined. Where it is worked out by a formula, RICS adds, the formula is usually based on the size and nature of the development permitted, with allowable planning costs deducted in the calculation.
• The deposit. Harper James says conditional contracts usually require a 10% deposit, which can be refunded if the conditions are not met.
• The end date. The contract carries a long-stop date, after which it can be ended if the conditions have not been satisfied, leaving the owner free to deal with the land again.

The defining feature is certainty in both directions. Once the condition is met, the buyer must buy and you must sell. That suits a buyer who is already confident of planning and wants to lock the land in. Our guide to what a conditional contract is goes through the planning condition, the deadlines and the tax date in full.

An option agreement gives the buyer the right to buy your land, but no duty to do so. RICS puts it simply: an option is similar to a conditional contract, but the developer is not obliged to purchase the land. The buyer, called the option holder, does the planning work and decides whether to buy once it has a permission it is satisfied with.

1. Grant. You sign the option agreement. It is a contract for an interest in land, so it must meet the writing rule in the 1989 Act. You remain the owner and keep using the land.
2. The option period. The option holder pays for and runs the planning. Stephens Scown, a law firm, notes that initial option or promotion periods of five or ten years, or even longer, are common.
3. Exercise. Once planning is secured, the option holder serves a written notice on you to exercise the option. The option holder chooses whether and when to serve it, within the period the agreement allows, and the notice turns the right into a binding sale.
4. Completion. The sale completes as the agreement sets out, the price is paid and the land is transferred.

Why There Is No Legal Maximum Length

Older land law limited how far into the future some rights over land could reach, under what was called the rule against perpetuities. The Perpetuities and Accumulations Act 2009 narrowed that rule to a short list of interests, mainly in trusts and wills, and the explanatory notes to the Act say that under it the rule does not apply to most options and rights of pre-emption. The length of a modern option is therefore a matter for the agreement itself, planned around the planning route the land needs.

Two Ways an Option Price Is Set

An option price is either a figure written into the agreement at the start or a formula based on what the land is worth once it has planning, worked out when the option is exercised. Our guide to option agreements sets out both and explains how ours works from signing to completion. What the formula route can mean in practice is shown by a case the Court of Appeal decided in May 2025.

In Bratt v Jones, a landowner had granted an option over land at Bodicote, near Banbury, in 2002, with the price to be worked out from the land's market value. Outline permission for 82 homes followed in 2012. An independent surveyor appointed under the agreement valued the land as at June 2013, and the option was exercised at the price his figure produced. The landowner believed the land had been valued far too low and sued the surveyor for negligence.

The claim failed at trial and again on appeal. The trial judge reached his own view of the value, but held that a competent valuation of a development site of this kind could fall anywhere within 10% to 15% of it, and the surveyor's figure was inside that range. The Court of Appeal dismissed the appeal on every ground, almost twelve years after the valuation date. The RICS Land Journal draws the lesson that development sites are notoriously difficult to value, that before permission is granted the margin of error may well be greater, and that it was with issues like these in mind that RICS published its new standard. Under a fixed price, there is no valuation at the end to disagree about.

Under a promotion agreement you appoint a promoter to get planning permission, and once it is granted the land is sold on the open market. The promoter does not usually buy the land itself. RICS describes the arrangement as one where the landowner will appoint a promoter who will be responsible for obtaining planning permission.

Tom Thorn of HCR Law sets out the usual shape in a guide of October 2025. The promoter funds all of the planning promotion and marketing costs, and the landowner's relevant professional costs, and may pay a premium to enter into the agreement. The landowner keeps ownership until the land is sold and agrees to sell if planning permission is obtained. The money then flows in a set order.

1. The land is sold on the open market once planning permission has been obtained, to a buyer such as a housebuilder.
2. The promoter's outlay is repaid first. HCR Law describes the landowner reimbursing the premium paid and the promoter's costs from the gross sale receipts.
3. The promoter's fee is taken. HCR Law describes it as an agreed percentage of the net sale receipts. RICS describes the fee as usually based on a percentage of the difference between the land's original value and the sale price, with an adjustment to reflect the promoter's costs.
4. The balance comes to you, before your own tax on the gain.

If planning is not obtained by the date in the agreement, HCR Law explains that the agreement terminates and neither the premium nor the promoter's costs are reimbursed. Because the promoter is paid out of the same sale as you, both of you are working towards a sale. What you receive is not known until the land is sold and the deductions are settled. The way each deduction is worked out, with figures, is in our guide to promotion agreement fees and deductions.

An agreement for the future sale of land is protected by an entry at HM Land Registry, so that it binds anyone who later buys the land. The rule behind this is section 29 of the Land Registration Act 2002. When registered land is sold for value, the buyer's registration postpones any interest whose priority is not protected at the time. An interest is protected if, among other things, it is the subject of a notice in the register. That is why a buyer under an option or conditional contract registers a notice: without it, the agreement could be defeated by a sale to someone else.

Section 32 of the same Act adds a point that is easy to miss: the fact that an interest is the subject of a notice does not necessarily mean that the interest is valid. What the notice does is protect the priority of the agreement, if the agreement is valid. Whether it is valid depends on the signed document itself, which is why the writing rule in the 1989 Act and the registration rules work together.

For unregistered land, the Land Charges Act 1972 defines an estate contract to include a contract conferring a valid option to purchase, a right of pre-emption or any other like right. An outright sale needs none of this, because the land simply transfers and the buyer registers itself as owner.

A separate set of rules, the Provision of Information (Contractual Control) (Registered Land) Regulations 2026, applies from 6 April 2027 and covers options, conditional contracts and similar rights over registered land. Under regulation 4 the duty to provide the information to HM Land Registry falls on the grantee, the company holding the right, never on the landowner; our guide to whether you need a solicitor to sell land covers both registrations.

Reading down the columns, the pattern is clear. The outright sale is the only route with no planning period: speed, at today's value. The three agreements all move the planning cost and risk off your side of the table, and the real differences between them lie in two rows: how the price is set, and when you know it.

One route is not in the table, because it is not really a way of selling. You can apply for planning permission yourself and then sell the land with it; you pay for every survey and fee and carry the risk of refusal yourself, and our guide on whether to sell land with or without planning permission sets out what that involves.

• Outright sale. Land with no realistic planning prospect, or an owner who needs a clean break and money now, such as executors with tax or debts to settle. Auction suits land that is easy to describe and where a fixed sale date matters more than anything else.
• Conditional contract. Land where the planning case is already well advanced, such as a site allocated in an adopted local plan, and a buyer confident enough to commit itself to buy before permission is granted.
• Option agreement. Land where planning is achievable but takes real work and money: surveys, a local plan submission, an application and perhaps an appeal. The option holder takes all of that on and decides at the end whether the permission works for it.
• Promotion agreement. Larger sites where the promoter expects strong demand from housebuilders once planning is granted, and an owner content for the figure to be settled by a sale at the end, after the promoter's costs and fee.

Two features of the land itself shape all four. First, whether everyone who owns it is ready to sign: joint owners, trustees and executors all have to agree, and a known figure makes that conversation far easier than a share of an unknown future sale. Second, the planning route: land that needs to go through a local plan needs an agreement long enough to see it through.

1. A free desktop review. We look at your land from records and maps and tell you plainly whether it has a case. We do not contact the council, your neighbours or anyone else about your land without your agreement.
2. Heads of terms. A short written summary sets out the price, any option fee, the land included and how your legal and agent fees are covered. The price is set above what your land is worth today in its current use, and it is written down as a figure before any planning money is spent.
3. Your own advisers. You choose your own solicitor and land agent, and we work with whichever you appoint. We contribute to their fees, so it costs you nothing to get it done properly.
4. The option agreement. Our solicitors register the option on your title. You remain the owner and keep using the land as you do now until completion.
5. The planning work. We pay for and run all of it, at our own cost and risk: surveys, the application, the Section 106 negotiation and any appeal. On a larger site that can reach £300,000. The price is not reduced if costs rise, and the agreement continues while any planning application or appeal is being decided.
6. Completion. Once planning permission has been secured, we complete the purchase and you receive the agreed price on completion, with milestones set out in the agreement.
7. If planning is not achieved. You keep your land and owe nothing. Nothing is advanced to you to be taken back later.

Set against the four columns above, that removes the questions each route leaves open. There is no valuation at the end, so no room for the kind of disagreement RICS describes. There is no open market sale to wait for, and no list of costs and fees to come off the figure. And there is no planning bill on your side of the table, whatever happens.

If you would like a straight answer about your own land, a free desktop review is the simplest place to start. It costs nothing and commits you to nothing.