Glossary

Development land terms explained

Plain-English definitions of the terms you will meet when selling land in England and Wales.

Affordable housing

Homes for sale or rent for people whose needs are not met by the market, such as social rent, affordable rent and shared ownership. It is usually secured through a Section 106 agreement on larger sites. Local plans in England and LDPs in Wales set thresholds and percentages, which affect land value.

Agricultural tenancy

A lease of farmland. Older tenancies under the Agricultural Holdings Act 1986 can give tenants strong security and, in some cases, succession rights, so recovering land for development can take time and may involve compensation. Newer lettings are usually Farm Business Tenancies. Specialist advice is essential.

Allocation

Land identified in an adopted local plan, LDP or neighbourhood plan for a particular use, such as housing, often with an indicative number of homes and site requirements. Allocation gives strong support in principle, but a planning application is still needed, and detailed issues such as access and design must be resolved.

Biodiversity net gain

An English requirement for most developments to leave habitat at least 10% better than before, measured using the statutory metric. From 6 August 2026, non-major sites of 0.2 hectares or less are exempt unless priority habitat is affected. Wales has no mandatory metric and applies a net benefit for biodiversity approach instead.

Brownfield land register

A public register kept by each local planning authority in England of previously developed land it considers suitable for housing. Part 1 lists suitable sites, and sites entered in Part 2 are granted permission in principle. Being on the register can signal support for redevelopment. Wales does not operate equivalent registers.

Call for sites

An invitation from a planning authority for landowners, agents and promoters to submit land for consideration in a new or reviewed development plan. Submitted sites are assessed for suitability, availability and achievability. Responding is free, but submission does not guarantee that land will be allocated or granted planning permission.

Candidate site

In Wales, land formally submitted for consideration during preparation of a Local Development Plan. Candidate sites are published and assessed against the plan's strategy and site criteria, and only some go on to become allocations. The term is also used informally in England for land put forward through a call for sites.

Capital Gains Tax (CGT)

Tax on the gain an individual or trustee makes when selling or disposing of land, broadly the sale price less the base cost and allowable expenses. Companies pay corporation tax instead. Reliefs, timing, option payments and how the sale is structured can all change the outcome, so speak to a tax adviser early.

Class MA

An English permitted development right allowing buildings in Commercial, Business and Service (Class E) use to become homes through prior approval. The building must have been in Class E use for two years. Since 5 March 2024 there is no floorspace cap or vacancy requirement. It does not apply in Wales.

Class Q

An English permitted development right allowing agricultural buildings to become homes through prior approval, without a full planning application. Since 21 May 2024 it allows up to 10 homes, 1,000 square metres in total and 150 square metres each. It is excluded in National Parks, National Landscapes and listed buildings. Wales has no equivalent.

Clawback

A term often used interchangeably with overage, describing a right to recover part of a later increase in land value. It is also used for repaying a grant, subsidy or discount if land is used or sold in a way not originally agreed. Check exactly what any clawback clause covers before signing.

Community Infrastructure Levy

A charge per square metre of new floorspace that councils in England and Wales may levy to fund infrastructure, if they have adopted a charging schedule. Not every area charges it, rates vary by location and use, and reliefs exist, for example for self-build homes and affordable housing. It usually becomes payable on commencement.

Completion

The final stage of a sale, when the buyer pays the balance of the price and ownership passes to them, normally with vacant possession. The buyer then pays any Stamp Duty Land Tax or Land Transaction Tax due and registers the transfer at HM Land Registry.

Conditional contract

A contract for the sale of land that is exchanged now but only completes if agreed conditions are met, most often the grant of a satisfactory planning permission, also called subject to planning. It usually sets a longstop date, who pays for the application, and what counts as satisfactory permission.

Conservation area

An area designated by the local planning authority for its special architectural or historic interest. Extra controls apply to demolition, trees and some permitted development, and new buildings should preserve or enhance the area's character. In Wales, the Historic Environment (Wales) Act 2023 has applied since 4 November 2024.

Contaminated land

Land affected by substances, often from past industrial use, fuel storage or landfill, that could harm people, buildings or the environment. In planning, contamination is usually dealt with by conditions requiring investigation and remediation. Part 2A of the Environmental Protection Act 1990 contains a separate, narrower legal definition.

Easement

A right that benefits one piece of land over another, such as a right of access, drainage, or running pipes and cables. Easements are vital for development sites that need access or service connections across neighbouring land, and existing easements crossing a site can affect its layout.

Exchange of contracts

The point at which signed contracts are swapped and the sale becomes legally binding, usually with a deposit paid by the buyer. In an unconditional sale, completion follows on a fixed date. In a conditional contract, completion only happens once the agreed conditions, such as planning, are satisfied.

Farm Business Tenancy

The usual form of agricultural letting in England and Wales for tenancies starting on or after 1 September 1995, under the Agricultural Tenancies Act 1995. There are no statutory succession rights, and the tenancy ends in line with its terms and notice provisions, which helps when land is being sold for development.

First Homes

An English discounted market sale product for first-time buyers, sold at a discount to market value with a price cap. The national requirement for a quarter of affordable housing on planning obligations to be First Homes was removed in 2024, but councils can still seek them where they meet local need. Not used in Wales.

Five-year housing land supply

In England, councils should show deliverable sites for five years of housing need. Where they cannot, revised national policy allows development outside settlements to gain support in specified circumstances. Wales withdrew its five-year land supply policy in 2020 and now monitors delivery against each LDP's housing trajectory.

Flood zone

A mapped area showing the chance of flooding from rivers or the sea. In England the Environment Agency's Flood Map for Planning uses Zones 1, 2 and 3. In Wales, Natural Resources Wales' Flood Map for Planning shows zones for rivers, sea, and surface water and small watercourses, plus TAN 15 defended zones.

Full planning permission

A planning permission granted on a fully detailed application, covering layout, design, access and landscaping, so no reserved matters remain. Unless a condition says otherwise, work must normally begin within three years in England and five years in Wales. Pre-commencement conditions usually need discharging before a start on site.

Golden Rules

England's requirements for major housing on land released from, or developed in, the Green Belt: higher affordable housing, typically 15 percentage points above the highest local requirement and capped at 50%, necessary infrastructure improvements, and new or improved green space the public can access. They do not apply in Wales.

Green Belt

Land designated around certain towns and cities to keep it permanently open and prevent urban sprawl. Most new building is treated as inappropriate unless an exception or very special circumstances apply, and boundaries change mainly through local plans. In Wales, green belts and green wedges are designated through development plans, with no grey belt category.

Grey belt

An England-only planning term for Green Belt land that does not strongly contribute to checking urban sprawl, stopping towns merging or preserving the setting of historic towns. Grey belt can be suitable for development through plan-making or planning applications, subject to the Golden Rules. There is no grey belt in Wales.

Heads of terms

A short written summary of the main commercial terms agreed between buyer and seller, such as price, deal structure, conditions, timescales and who pays which costs. Heads of terms are usually marked subject to contract and are not legally binding, but they guide the solicitors drafting the contract.

Housing Delivery Test

An annual government measure in England comparing homes actually built in each council area over the previous three years with the number required. Poor results trigger action plans and, where delivery falls below 75%, national policy can support housing outside settlements. The test does not apply in Wales.

Introducer agreement

A written agreement between a land buyer and an agent, land finder or other introducer setting out when a fee is payable for introducing a site. Good practice is to sign it before site details are shared, pay only on completion, and disclose any fee to the landowner in writing.

Land Transaction Tax (LTT)

The Welsh equivalent of Stamp Duty Land Tax, which replaced it in Wales from 1 April 2018 and is collected by the Welsh Revenue Authority. Rates and bands differ from England's. As with SDLT, it is normally paid by the buyer, and specialist advice is recommended for development land.

Listed building

A building on the national list of buildings of special architectural or historic interest, graded I, II* or II. Listed building consent is needed for works affecting its character, and new development nearby must consider its setting. Listing is handled by Historic England and the government in England, and by Cadw in Wales.

Local Development Plan (LDP)

The development plan prepared by each local planning authority in Wales, setting housing requirements, site allocations and policies. It sits within Future Wales: the National Plan 2040 and any Strategic Development Plan. Landowners can submit land at the candidate site stage, and housing delivery is monitored against the plan's trajectory.

Local plan

The development plan prepared by a local planning authority in England, setting how many homes are needed, where they should go and the policies applications are judged against. Sites are put forward, assessed and examined by an independent inspector before adoption. Neighbourhood plans can add more local policies and allocations.

Longstop date

The final date in a conditional contract or option by which the conditions, such as planning permission, must be met. If they are not met by then, either party, or sometimes only one, can usually end the agreement. Longstop dates are often extendable if an appeal or legal challenge is under way.

Medium development

A category in England's revised NPPF for schemes of 10 to 49 homes on sites of up to 2.5 hectares. Plans should allocate at least 10% of housing on sites of 1 hectare or less and a further 10% on sites of 1 to 2.5 hectares. Wales has no equivalent category.

Nutrient neutrality

An approach in England where protected rivers, lakes or estuaries suffer from nutrient pollution, so new homes must show they will not add nitrogen or phosphorus, usually by buying mitigation credits or creating wetlands. The Planning and Infrastructure Act 2025 created Environmental Delivery Plans as an alternative route.

Option agreement

A contract giving a buyer the right, but not the obligation, to buy land within a set period, usually once planning permission is obtained. The buyer normally pays an option fee and funds the planning work. The price is often market value less an agreed discount, or a minimum price. Independent legal advice is essential.

Outline planning permission

A planning permission that establishes whether a development is acceptable in principle, while some or all details are left as reserved matters for later approval. Time limits for submitting reserved matters and starting work are set by condition and differ between England and Wales.

Overage

A further payment due to a seller after completion if the land later gains extra value, for example from a new or improved planning permission or more homes than expected. Overage terms set the trigger, the share payable and the time period, and are usually secured by a restriction or legal charge on the title.

Permission in principle

An England-only, two-stage route to planning permission for housing-led development. The first stage settles location, land use and amount of development. It is granted on application for non-major schemes, lasting three years by default, or through Part 2 of a brownfield land register, lasting five years. It does not exist in Wales.

Personal interest (Estate Agents Act)

Under section 21 of the Estate Agents Act 1979, an estate agent with a personal interest in land, including where a connected person has a beneficial interest, must disclose its nature and extent before negotiating. Separate guidance requires agents to disclose referral fees and other financial benefits to clients in writing.

Phase 1 desk study

A preliminary contamination risk assessment based on historical maps, environmental records and a site walkover. It identifies possible sources of contamination and how they could reach people or water, and recommends whether intrusive Phase 2 ground investigation is needed. Councils often require one with a planning application.

Phosphates

Nutrients that harm river habitats in excess. In Wales, tighter phosphorus targets for river Special Areas of Conservation, introduced in 2021, found many water bodies failing, including much of the Usk, Wye and Cleddau. Applications in affected catchments must show they will not increase phosphate levels.

Previously developed land

Often called brownfield land: land lawfully occupied by a permanent structure, including its curtilage. The planning definition excludes agricultural and forestry buildings, residential gardens and parks in built-up areas, and land where the remains have blended into the landscape. Planning policy in England and Wales generally favours reusing it.

Prior approval

A lighter process for permitted development, such as Class Q or Class MA, where the council only checks specified matters, for example transport, flood risk, contamination, noise or design, rather than the principle of development. If the council does not decide within the time limit, approval may be deemed granted.

Promotion agreement

An agreement where a land promoter pays for and manages the planning process, then markets the land with the landowner once permission is secured. The landowner keeps ownership until sale, and the promoter recovers its costs and takes an agreed share of the net sale proceeds. Terms vary widely, so take advice.

Ransom strip

A piece of land, sometimes very narrow, that controls access or service connections to a development site. Because the site cannot be developed without it, its owner may be able to ask for a substantial payment. Buyers check for ransom strips early, often at road frontages and visibility splays.

Reserved matters

The details left out of an outline planning permission for later approval: access, appearance, landscaping, layout and scale. A reserved matters application must keep within the terms and conditions of the outline permission and be submitted within the time limit it sets. Development cannot begin until the reserved matters are approved.

Residual valuation

A method of valuing development land by estimating the completed development's value and deducting build costs, fees, finance, planning obligations, levies and a developer's profit. What remains is the residual land value. Small changes in any input can move the result significantly, so assumptions should be checked.

Restrictive covenant

A legal obligation in title deeds limiting how land can be used, such as no building or a single dwelling only. It can bind later owners. Options include negotiating a release, taking out indemnity insurance, or applying to the Upper Tribunal (Lands Chamber) to modify or discharge it.

Right of way

Either a private right to pass over someone else's land, which is a type of easement, or a public right of way such as a footpath or bridleway recorded on the definitive map. Public rights of way crossing a site normally stay open or need a formal diversion order before building.

Section 106 agreement

A legal agreement, or planning obligation, made under section 106 of the Town and Country Planning Act 1990, that binds land to obligations such as affordable housing, financial contributions or open space. Obligations must be necessary, directly related and fair in scale. In Wales these provisions are being consolidated into the Planning (Wales) Act 2026.

Self-build plot

A plot sold to an individual or group to build their own home, ideally serviced with access and utilities. Councils in England must keep a self-build register and grant enough suitable permissions. Self-build homes can qualify for Community Infrastructure Levy relief. From 6 August 2026 the separate BNG self-build exemption was withdrawn.

Sequential test

A planning test in England that steers new development to areas at the lowest risk of flooding first. If reasonably available sites exist in lower-risk areas, a site in a higher-risk area may be refused, and some uses also need an exception test. Wales applies its own flood risk tests under TAN 15.

Settlement boundary

A line on a local plan or LDP policies map, sometimes called development limits, inside which new development is generally acceptable in principle. Land outside is usually treated as countryside. England's revised national policy supports development within settlements and allows support outside them only in specified circumstances.

Stamp Duty Land Tax (SDLT)

The tax a buyer pays on land and property purchases in England, and in Northern Ireland, above set thresholds. Bare development land is often taxed at non-residential rates, but the rules depend on the facts. It is paid by the buyer, not the seller, and a tax adviser should confirm the position.

TAN 15

Technical Advice Note 15: Development, flooding and coastal erosion, the Welsh Government's national planning guidance on flood risk. The updated version took effect on 31 March 2025 and works with the Flood Map for Planning. Proposals in higher-risk zones usually need a Flood Consequences Assessment.

Technical details consent

The second stage after permission in principle in England. The applicant submits the detailed design, and once technical details consent is granted, the two stages together amount to full planning permission. The application must follow the terms of the permission in principle and be decided while it is still in force.

Title plan

The plan held by HM Land Registry for a registered title, showing the extent of the land, usually edged in red. It normally shows general boundaries only, not exact legal boundary positions. Buyers compare it with the site on the ground to spot gaps, overlaps or possible ransom strips.

Tree preservation order (TPO)

An order made by a local planning authority protecting specific trees, groups of trees or woodland. Felling, lopping or uprooting protected trees normally needs consent. Trees in conservation areas have similar protection. TPOs can affect layout, access and the number of homes a site can take.

Vacant building credit

An English national policy incentive that reduces the affordable housing contribution when a vacant building is reused or replaced, by giving credit for the existing floorspace. It now sits in policy HO8(4) of the revised NPPF. Abandoned buildings do not qualify, and it does not apply in Wales.

Vacant possession

Handing over land or buildings on completion free of occupiers, tenancies, licences and belongings, so the buyer can take control immediately. Development land buyers usually require it, so grazing licences, agricultural tenancies and other occupation arrangements need to be ended, or timed around the sale.

VAT option to tax

An election by an owner to charge VAT on sales or lettings of commercial land and buildings that would otherwise be exempt. Once made, it generally cannot be revoked for 20 years. It can be disapplied in some cases, such as buildings for conversion to homes, so take VAT advice.

Visibility splay

The triangle of land at a junction or access that must be kept clear of walls, hedges and other obstructions so drivers can see approaching traffic. The highway authority sets the required dimensions based on road speeds. If a splay crosses land outside the site, rights or land may need to be acquired.