Guide
Promotion agreements explained: a guide for landowners.
A promotion agreement is a contract in which a land promoter pays to take your land through planning, then sells it on the open market and takes an agreed share of the proceeds. You keep ownership until the sale, the promoter carries the cost and risk of planning, and its reward rises and falls with the price your land achieves.
In this guide
How it works, step by step
- Heads of terms. You agree the main commercial points with the promoter, with your land agent negotiating: the promoter's share, the cap on its costs, the minimum price, the term and the planning milestones.
- Signing. Solicitors draw up the agreement, and the promoter registers its interest on your title at HM Land Registry.
- Promotion. The promoter works the site through the planning system. That can mean putting it forward in the council's call for sites, making representations on the Local Plan, preparing technical reports, submitting an application and, if needed, appealing.
- Sale. Once planning is granted, the land is marketed to housebuilders. The agreement sets the minimum price and what you must agree to before a sale.
- Completion. From the sale proceeds, the agreed sale costs and the promoter's capped costs come off, the promoter takes its share, and you receive the rest.
What promoters look for
Promoters take on sites they believe can win planning for housing, because that is the only way they are paid. Most look for:
- land on the edge of an existing town or village, with shops, schools and public transport within reach;
- a safe way in from a public road, and room for drainage;
- land outside the areas at highest risk of flooding;
- no designation that makes housing hard to justify, such as Green Belt or a National Landscape;
- enough land to matter, usually 5 acres or more, though some smaller promoters take less;
- a council that needs more homes than its Local Plan provides, or a plan being reviewed.
If your land misses some of these, it may still have a future, but expect fewer and more cautious offers.
What the promoter pays for
Getting planning permission for housing is slow and expensive, which is why landowners rarely do it alone. The promoter normally pays for:
- planning consultants and the planning strategy;
- technical reports: highways, drainage and flood risk, ecology, heritage, landscape and noise;
- application fees, consultation and any appeal, including barristers and expert witnesses;
- a contribution to your reasonable legal and agent fees.
It recovers agreed costs from the sale. If planning never comes, it normally bears them itself. That is the risk it is paid to take.
How the money is split: a worked example
A promoter takes on a 20-acre field. Planning is granted and the land sells to a housebuilder for £8 million. The promoter's costs came to £400,000, under a £500,000 cap, and its share is 15% of net proceeds. These are illustrative numbers, not market rates.
| Step | Amount |
|---|---|
| Sale price | £8,000,000 |
| Less sale costs (agents and lawyers, 1.5%) | −£120,000 |
| Less the promoter's planning costs | −£400,000 |
| Net proceeds | £7,480,000 |
| Less the promoter's 15% share | −£1,122,000 |
| You receive | £6,358,000 |
Two things change this figure more than landowners expect. VAT at 20% on the promoter's £1,122,000 share is £224,400; whether you can reclaim it depends on your VAT position, so settle it in the heads of terms. And if competition between housebuilders lifts the price to £8.8 million, you receive about £7,028,000 (the same planning costs, with sale costs rising to £132,000), because you and the promoter both gain from a better price.
The terms to negotiate
| Term | Push for | Watch out for |
|---|---|---|
| Promoter's share | A fixed percentage of net proceeds | A share worked out before costs come off |
| Costs | A fixed cap and a clear list of what counts | No cap, interest on costs, or staff time charged as costs |
| Minimum price | A per-acre floor set with your agent | A minimum far below today's values |
| Term | A firm long-stop date | Open-ended extensions |
| Planning milestones | Dates, and a right to end the agreement if they're missed | Vague "reasonable endeavours" |
| The sale | Open marketing and your consent to the buyer and terms | The promoter alone deciding when and to whom |
| After it ends | No cost recovery, or a short tail | Years of cost recovery if you later sell |
Also check what you can do with the land during the term, how any land or home you keep will be protected, and what happens if the promoter assigns the agreement or is sold.
Promotion or option?
Under an option agreement, a developer buys the land itself at a valuation less a discount, often paying you an option fee up front. Under a promotion agreement, the price is tested on the open market and the promoter's reward is tied to it. Our side-by-side comparison works through the same site both ways.
Before you sign
- Compare heads of terms from two or three promoters, in the same format.
- Ask each for a worked example showing what you would receive.
- Check each promoter's record with our 12 questions.
- Agree the VAT position and take tax advice.
- Confirm the cap on costs, the minimum price and the long-stop date.
- Use a specialist land agent and solicitor acting for you alone.
Since 1 March 2026, RICS members advising on these agreements must follow the RICS professional standard Land agreements for development purposes. Ask whether your agent is RICS-regulated.
Questions landowners ask
Do I pay anything up front under a promotion agreement?
No. The promoter pays for the planning work. Promoters normally contribute to your own legal and agent fees too; check whether they pay these as you go or recover them from the sale.
What happens if planning is refused?
The promoter can usually appeal or apply again within the term. If the term ends without planning, the agreement ends and the promoter normally bears its own costs. Check whether it can recover them if you sell within a set time afterwards.
Can I sell part of my land during the agreement?
Usually not without the promoter's consent, because its planning work covers the whole site. If you want to keep or sell a plot, for a family home for example, agree it in the heads of terms.
How long do promotion agreements last?
They vary, often several years, with extensions while an application or appeal is live. The figure to look at is the long-stop date: the latest the agreement can run, whatever happens.
This guide is general information, not legal, tax or valuation advice. Every site and every agreement is different, so take advice from qualified professionals on your own situation before you sign anything.
Considering a promotion agreement?
Tell us about your land and we'll suggest up to three promoters to compare.