For developers and investors buying sites
Development Site for Sale? Why the Agent's Numbers Rarely Match the Real Ones
Sviatoslav JerdetchiiCEO & Founder of Craftex. Updated , 6 min read
The short answer
A development site for sale is marketed to get the highest price for the seller. The sales pack is built to look good, so the real numbers are usually worse.
- The selling agent works for the seller and is usually paid on the price achieved.
- Packs often use top-end sales values, the most units and a generic build rate.
- Abnormal costs, planning obligations and a realistic programme are often missing.
- Cost the scheme yourself, with builders, before you agree a price.
Every development site for sale comes with a story. A glossy pack, a set of drawings, a unit count and a profit figure that makes the price look fair. Many buyers take that story as the starting point. Some never test it.
We develop and build in London, and we are often asked to look at a site after the buyer has agreed a price. Too often the real numbers do not work. This guide explains why the sales pack and the real numbers differ, and how to check a site before you buy.
Looking at a site right now? Book a site visit and we will cost it before you commit.
Who the sales pack is written for
Start with the incentives. They explain almost everything that follows.
- The selling agent works for the seller. Their job is the best price and terms for their client. That is not dishonest. It is the job.
- The agent's fee is usually linked to the sale. A higher price, sooner, is better for them too.
- The pack is marketing. It is written to attract bids. It is not a valuation for you, and usually says so in the small print.
- The buyer is often in a hurry. Bids, best-and-final rounds and short exclusivity periods leave little time to check. In a best-and-final round, each shortlisted buyer makes one last bid. An exclusivity period is a short window when the seller deals with you alone.
None of this makes the agent a villain. It means nobody on the selling side is paid to find the problems for you. That is your job, or the job of people you appoint.
Development site for sale: six ways the numbers flatter the deal
These are the gaps we see most often when we rebuild a seller's appraisal. Each one has an honest reason to exist. Each one moves risk to the buyer.
- "Up to" sales values. The pack takes the best recent sale nearby and applies it to every unit. Real values vary by floor, aspect, size and timing.
- The most units, not the likely units. The unit count assumes the council accepts the densest scheme. Pre-app comments, space standards or a second staircase can reduce it.
- A generic build rate. A cost per square metre from a different type of building, or from a year ago. It rarely includes the site's own problems.
- No abnormal costs. Demolition, poor ground, party walls, utilities and access are left out or shown as small round numbers.
- Planning obligations underplayed. Section 106 contributions, affordable housing and CIL are missing, estimated low, or "subject to negotiation".
- A short programme. A short build looks cheap to finance. Real programmes include design, approvals, procurement and any building safety gateways.
The pack vs the real numbers: an illustration
| Sales pack | Re-costed | |
|---|---|---|
| Number of flats | 14 | 12 |
| Sales value (GDV) | £8,000,000 | £7,200,000 |
| Build cost | £3,200,000 | £3,700,000 |
| Abnormal costs | £0 | £400,000 |
| Fees, obligations, finance and sales | £1,400,000 | £1,600,000 |
| Developer profit at 15% of GDV | £1,200,000 | £1,080,000 |
| Land value that leaves that profit | £2,200,000 | £420,000 |
The seller asks £2,200,000, which looks fair on the pack. On the re-costed numbers, the land is worth about £420,000 to a buyer who wants a 15% profit. Pay the asking price, and on these numbers you lose about £700,000.
National planning guidance says 15% to 20% of gross development value may be considered a suitable developer return for plan making. It also says the price paid for land does not excuse failing to meet planning policy. Overpay, and the loss is yours.
For the method behind this table, read our guide to development appraisal and residual land value.
Why build costs are where most packs go wrong
The sales value is easy to check. You can look at recent sales. The build cost is harder, and that is where most packs are weakest.
Agents and many valuers are not builders. They use a cost per square metre from published data or from another scheme. A builder prices this building, on this site, today.
- Materials still move. The government's material price index was up 6.4% in August 2026 on a year earlier. Fabricated structural steel was up 21.2%.
- London sites cost more to run. Access, deliveries, neighbours, cranes and welfare all cost money.
- Building safety adds design and time. Taller residential buildings need Building Safety Regulator approval before work starts.
- The design is not finished. Planning drawings leave out the structure, services and details that a builder must price.
Our guide to abnormal costs in construction goes through the items that most often break a deal. For the wider picture, see why construction is so expensive in the UK.
Red flags in a development site sales pack
None of these mean "walk away". Each one means "check before you bid".
- The appraisal has no build cost breakdown, just one total.
- There is no line for abnormal costs, or no contingency.
- Sales values are quoted as "up to" or from one sale only.
- The unit count is based on a scheme that has not been to pre-application advice.
- The planning permission is close to its time limit, with no proof of a lawful start.
- Section 106 and CIL are "to be confirmed".
- You are given days, not weeks, to bid.
How to check a development site before you bid
- Get everything the seller has. Title, planning documents, surveys, the appraisal and any pre-app response.
- Visit with a builder, not just a surveyor. Access, neighbours, ground and the existing structure all change the price.
- Rebuild the appraisal yourself. Use realistic sales values for each unit type, not the best one.
- Price the build properly. Element by element, with abnormal costs and a contingency, usually 5% to 10% of construction cost.
- Add the real programme. Design, approvals, procurement, building and sales, then finance on the whole period.
- Set your maximum price, then bid below it. Do not let a deadline move your ceiling.
Our development site due diligence checklist covers the legal and technical checks. If you are choosing between a site with planning and one without, read buying land with or without planning permission.
Where we fit
We sit on the buyer's side of the table. Our team covers planning, design, development management and construction, and around 60% of our labour is in-house. So when we cost a site, we price it the way we would build it.
- Before you buy: we visit, test design options, cost the scheme and run the appraisal through our development feasibility and site appraisal service.
- After you buy: we can run the development and the build as one team, on an open book, where you see every cost we pay. See our cost plus contract guide.
- Our terms. On a full-cycle project we build at cost plus 5% and charge from 20% of the development profit, depending on the agreement.
Because part of our reward is a share of the profit, a site that does not work is bad for us too. We would rather tell you not to buy it.
A development site for sale is only a good buy at the right price. The right price comes from real costs, not from the pack. Before you bid, book a site visit and we will show you the real numbers.
