Considerations To Make When Purchasing Land

by : Thomas Pretty

Currently there are record numbers of people purchasing land as a viable form of investment, but why are so many purchasing plots? The reasons are diverse, some are purchasing land purely to make a financial return on the plot while others, inspired by such television programmes and 'Grand Designs' are using land to build their dream home.

For those thinking of purchasing land it is important to understand the four major varieties. These are agricultural, Greenfield, self-build and woodland. Agricultural land is mainly bought by people who either want to keep animals and livestock such as horses for grazing. Greenfield covers a range of types of plots varying from open grassland and scrubland. The purchasing of self-build land is rapidly becoming the most popular variety in the UK with almost 25,000 people deciding on this course of action in the last year alone. Woodland is also popular with many investors buying attractive plots and areas where plantations would be viable.

Now these types of land are understood it is important to look at why increasing numbers of people are purchasing land. One of the major reasons behind this is that land is real, unlike shares; it can be walked on and seen; meaning many people are more inclined to invest. In addition to this, many people are choosing land because it can be considered a finite resource, especially in a country as small as Britain. While property prices may rise and fall, as the amount of land for sale drops, the price will only rise, making it a sensible long term investment.

Another reason why people are purchasing land as a form of investment is its relative affordability. While an average semi-detached property can cost as much as a quarter of a million pounds, a similar sized plot will only cost around ten thousand. Due to this situation, many are purchasing plots and deciding to build their own homes, making them not only personal, but cheaper as well. As the UK experiences a current shortage in suitable housing the increased purchasing of investment land is understandable. As a result of the shortage the value for desirable pieces of land will increase and hence the investment is sound. It is likely this situation will continue further increasing plot prices.

The reason land is such a great investment is the variety of uses for any particular plot. If you are looking for a plot to graze animals, building business premises or even your dream home a plot is an affordable method of doing this. In addition, the piece of land will carry on accumulating value while you own it meaning that even if it is just sitting there falling fallow, you will eventually be able to make a decent return. In a world where property prices are suffering, land is continuing to be strong.

When purchasing land there are various factors that you must take account of. These factors include the general wealth of the local area and subsequently indicators of the eventual plot price. In addition it is worth taking notice of the detached house prices in the region; often a plot is around a third of a house price, although this will normally include planning permission. You should also consider how well land sells in the area, by doing this you ensure the market for your plot once planning permission has been achieved. Your final consideration when purchasing a plot should be how long it will take to receive planning permission. While government initiatives are trying to speed up the process, it can still vary immensely in different areas.

By following this advice and understanding the key points surrounding land investment your purchase should be sensible and worthwhile. Nobody wants to be stuck with a plot that is impossible to sell. Investment is always a risk, but by investigating thoroughly you should be able to minimise that risk and make best use of your capital.