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Case Study: Promotion Agreements - Part One

Solicitor and property investor Tariq Mubarak talks with Richard Little

This month Tariq speaks to Richard Little of Your Land Partner, a family business of house builders and developers founded in the 1950s by Richard's dad. He is the second in a lineage now spanning three generations in the business and his toddler grandson is likely to make this a fourth-generation business. Tariq discusses promotion agreements with Richard and how they use them as a great tool to work with landowners to maximise the value of their land.

Tariq: Richard, let's start with a little more about Your Land Partner as a business, and how it has evolved since your late father started it - walk me through what you guys do now.

RL: The business name ‘Your Land Partner’ is relatively new. We've been in the sector under lots of different business names and partnerships since the 1950s, when there was a lot of what we'd now call collaboration and joint ventures with landowners and other developers. Land was probably easier to come by in those days as there was less people doing what we did. In a particular area, there might be 10 or 12 people that can build out, say an acre field or thereabouts with a few houses on it. There's more competition now and the whole sector has changed. Over the years, we've primarily been involved in building residential homes. So rather than describe ourselves as the ‘developers’, which is a relatively new term, we prefer housebuilders. A lot of the national housebuilders such as Barratts or Persimmon go by that term too, instead of ‘developers’.

We focus primarily on residential properties. I don't know exactly how many we've done, but it's more than 3,000 homes that we’ve completed. We've also done a few conversions, probably in the region of 300 or so units.

TM: I want to explore something you mentioned. It’s interesting that you consider yourself as housebuilders and not ‘developers’. I think that identity and perspective makes you review an opportunity somewhat differently from say a property agent or planning uplift deal trader. Am I right that when you look at an opportunity, you're looking at it from the perspective of taking it through the whole process right up to building out the scheme in the end - you're not looking at it simply as ‘get the planning uplift and then trade the site on’. Is that fair to say?

RL: Yes, absolutely. You and I both know there are individuals and businesses out there that will take on a site, purely for the planning uplift potential with a view to trading the site on. Even the form of planning permission they apply for is designed to obtain planning permission as quickly as possible and perhaps as cheaply as possible so that they can trade the site on. Sometimes, the planning permission granted doesn’t account for the difficulties in actually building the scheme out or doesn’t cater for amenity space, because it doesn’t increase the GDV but the amenity spaces are the ones that improves the saleability of the built out units.

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