HPH224 : What due diligence should you carry out before buying land? – with Rob Wiggans
Rob Wiggans from RMP Property explains how you can minimise risks when buying land for development.
Interview with Rob Wiggans
Previously we spoke with Rob about what self-builders can learn from commercial land-buyers when looking for a plot of land. Rob used to work in the land buying department of Taylor Wimpey, and now works in property investment for RMP Property (now the Property Hub), so he knows a thing or two about what checks to carry out before buying a building plot.
More due diligence means there's less risk
“Due diligence is the vital, critical research that any person buying land has to conduct in order to provide security to their purchase and ensure that whatever they’re buying is right for their objective for that particular site.”
Even with due diligence carried out, things still can go wrong. But the more you do, the less risk there is likely to be.
Create your network first
Establish your team of key people before you get started. By first making contact with a recommended architect, they will be able to provide access to the relevant consultants to conduct your due diligence.
Carry out initial brief checks
On finding a piece of land, the key people Rob would first contact would be:
- Solicitor – to provide a quick red flag check on whether anything may crop up from a legal perspective;
- Ground consultant – they would do a quick check of local maps in the area;
- Architect – usually the sites Rob would be interested in have planning permission, so the architect would assess the quality of the planning permission and any conditions that are attached to it.
If further information was needed following that, options might be to go to an ecologist, services consultant or traffic consultant.
Understand the ground conditions
In terms of the site, the key piece of due diligence to explore is understanding the ground below the site to determine what foundations and ground works will be required. While virtually all pieces of land can be built on, the costs could be high if the ground conditions aren't favourable.
A ground investigation should comprise a phase one and a phase two. Phase one would be engaging a ground consultant to carry out a desktop study, using historical mapping and records to show how the land has been used in the past. This would cost in the region of £500-£1,000.
The ground consultant would then be able to advise to what extent you need to do a phase two, ie a physical investigation of the site where boreholes and trenches would be dug. If phase one has revealed any doubt that there could have been mining or contamination on the site previously, then there would need to be a more rigorous phase two investigation. This could be around £5,000-£10,000 for a small site.
A ground investigation can also provide some information on how good the drainage would be, but there is the option to carry out further drainage and flood surveys. Drainage design for foul and surface water will need to be submitted as part of the planning application or as a condition of the planning approval before works commence.
The extent to which archaeology and ecology surveys are needed would be dictated by the local authority.
Check how you can connect utilities
One option is to employ a services consultant to look at and assess what services are in the immediate locality. Alternatively you can go through the local authority and contact local service providers who can give you this information and advise how much it is likely to cost to connect to your house.
Ensure there is adequate site access
Access fundamentally covers whether you can get emergency services, waste trucks and other vehicles in and out of the site.
The first thing to bear in mind, is ‘visibility splay': whether you can reverse out of your drive and adequately see traffic, and whether you can be seen by that traffic. Planning applications will need provision for adequate access, and a traffic consultant would be able to provide that information.
Explore legal considerations
Ensuring you have a legal right of way onto your land is crucial. A solicitor would check if you are legally able to access the land from a title perspective and covenant perspective, whether there are ransom strips, and if you're crossing unregistered land to get to the site. Taking out an insurance policy of generally a few hundred pounds would cover costs if an applicable unregistered piece of land was later claimed for example.
Go with your gut instinct
“If you’ve always had an element of doubt about a particular site or ‘there’s something not right here,’ there probably is.”
Rob advises that if you don't have confidence in the site, then don't go ahead with it.
“Don’t develop a bias in terms of eagerness to pursue a site, just because you want to or you’re desperate to get on to a self-build project. Take your time.”
Do a trial run
If you find a piece of land that is out of your price range, or not in the area that you want, Rob suggests doing a dry run and practice the due diligence process. Consider it from access and legal perspectives, chat to a local architect about it and try and find out why it hasn't sold or what the positives and negatives of the site are.
By doing this practice, when you do find the site you want you'll have that experience and a sharper eye to know what to be looking out for.
Find out more
Visit the website of the Property Hub
Follow The Property Hub on Twitter
Listen to our previous podcast with Rob about what self-builders can learn from commercial land buyers.
Transcript
Download a transcript of the interview with Rob Wiggans.
