Hybrid Promotion Agreement – Stratford upon Avon District Council

Site area: 246 acres
Agreement type: Hybrid Promotion Agreement
Local Authority: Stratford upon Avon District Council

We already acted for two landowners who were proposing to enter land into the agreement and managed to secure instructions from a third. We originally had a number of direct approaches from developers on this site and decided following client’s instructions to offer the site to a shortlist of two promoters and two housebuilders. The site is a logical extension to an existing town and could provide up to 1800 dwellings with a secondary school.

The site is being promoted through the South Warwickshire Local Plan and are looking to secure an allocation for residential development including some employment use around 2025. Although proposals were put forward for both a Promotion Agreement and Option Agreement we ended up agreeing terms for a Hybrid Option whereby the promoter who is also a master developer and housebuilder will be able to purchase 40% of the site, the balance being sold on the open market in tranches.

The price level will be set by the preceding sale of the open market tranche with the developer being allowed to purchase the next phase based on the previous price subject to ratcheting for improving market conditions. If allocated the expected development will commence upon the site in 2027/2028 with sales of market for sale plots taking place regularly throughout the term.

The agreement has an overall lifespan of 20 years and we have incorporated tax and price suspension clauses within the agreement and a strong minimum price with indexation provisions to protect the landowners. The landowners have also entered into a Land Pooling Trust for tax efficient equalisation of sale proceeds.

For more information, please contact Jeff Paybody | jeff.paybody@howkinsandharrison.co.uk