Blog Post

Buying a property with planning permission at auction can be advantageous

Publish Date: 26 July 2023

By Jade Shrubsole

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Further reading

Why is it important to research auction results?

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Buying a property with planning permission at auction can be advantageous for buyers for several reasons:

Potential savings: Properties with planning permission often come at a premium when sold through traditional channels like real estate agents. At auctions, however, the competitive nature of bidding can sometimes lead to more reasonable prices. If the property has the potential for development or improvement, buyers might be able to secure it at a lower cost compared to its future market value after the development is completed.

Time efficiency: Planning permission can be a time-consuming and sometimes uncertain process. By purchasing a property with existing planning permission, buyers can save significant time and effort. They can proceed with the development immediately after acquiring the property, which could be especially appealing for investors and developers who want to start their projects promptly.

Reduced risks: Buying a property with planning permission provides greater certainty about what can be built on the land. It minimizes the risk of encountering unexpected obstacles during the planning application process, such as having the application denied or encountering significant delays. With planning permission in place, buyers can assess the feasibility of their project accurately.

Increased potential for profit: If the property comes with planning permission for a lucrative development, such as building multiple units or converting it into something more valuable, it can lead to a higher return on investment. Buyers who can see the potential and have the means to undertake the development can capitalize on this opportunity.

Limited competition: While some buyers may shy away from properties with planning permission due to the commitment and costs associated with development, this can result in less competition at auctions. As a result, motivated buyers can find themselves with an advantage during the bidding process, potentially securing the property at a favorable price.

Diverse investment options: Properties with planning permission may not only appeal to developers but also to buy-to-let investors or those looking for a property to live in themselves. Having planning permission opens up various possibilities for the buyer, increasing the property's attractiveness to a broader range of potential purchasers.

It's important to note that buying a property with planning permission also comes with its own set of risks and considerations. It's crucial for buyers to conduct thorough due diligence, assess the costs and potential returns of the project, and understand any restrictions or conditions associated with the planning permission. Consulting with property professionals and legal advisors can also be beneficial to make informed decisions. 

David Sandeman, Founder & Managing Director of Essential Information Group:

"In 1989 I bought a site in Clapham, London, at auction for £40,000 that had planning permission for a 4 bed house.  I built it, and lived there for 12 years before renting it out, as I moved away from the area.  I still have it, and it has been one of my best investments."

To search for properties with planning permission on our website, use the 'detailed search' option and tick 'Planning Permission' in the Residential / Commercial element section.