The Hidden Engine of Real Estate Returns
If you’re new to property investing or looking to deepen your understanding of value creation in development deals — this is the place to start.
Forget about construction margins for a moment. One of the most powerful drivers of profit in real estate happens long before a brick is laid: planning gain.
Especially in a high-demand, tightly regulated county like Oxfordshire, planning gain — or “value uplift” — is the key that turns underused land into high-return investments.
This article breaks down what planning gain is, how it works, why it matters, and how you — as a third-party investor — can benefit from it.
Imagine you buy a field outside a village. Today, it’s just pasture — worth maybe £50,000. But if you secure planning permission to build say, four homes, its value can jump to £500,000 or more.
That increase — created not by bricks or mortar, but by permission — is planning gain.
According to a 2024 report by the Centre for Cities, residential land with planning permission is worth 10–100 times more per hectare than unconsented land. That’s not theory — it’s the quiet force that drives modern development.
As an investor, you’re not just betting on construction. You’re backing a strategy that captures this uplift — then delivers it through development or resale.
Importantly, when done with local expertise and in-depth planning knowledge, this approach can limit downside exposure for third-party investors. Local developers understand council policies, community objections, and hidden site risks — reducing uncertainty from the outset.
We explored in our “Hotbed” blog series how Oxfordshire is a unique market: - Green Belt constraints = limited developable land - Booming economy = steady population growth - High average incomes = strong buyer and tenant demand
This creates a scarcity of new housing. And scarcity means uplift becomes more valuable.
When land is in short supply, getting permission to build isn’t just a step in the process — it’s the value-creating event.
Public documents support this: - The 2024 South Oxfordshire and Vale of White Horse Viability Assessment confirms that small sites and change-of-use conversions offer the best viability once planning is secured. - The Office for Budget Responsibility (OBR) reports that planning delays cost the economy billions, but reforms could unlock over 170,000 homes nationwide — and Oxfordshire is a prime beneficiary.
For third-party investors, this means you’re stepping into a market where planning-led uplift is both likely and potent — especially when navigated by local teams who understand site history, stakeholder influence, and planning committee dynamics.
Let’s say you want to buy a vacant plot for £200k. - Without planning, that’s speculative land. - With outline planning for 3 houses, it may now be worth £450k.
That jump — £250k of new value — didn’t require a digger or scaffolding. It came from navigating the planning system.
OLD-Homes’ approach is to: - Source undervalued or underutilised sites - Secure or enhance planning consent - Exit or develop to capture the uplift
As an investor, your return is tied to the value creation event, not just the building process.
This is especially true in: - Infill plots (e.g. back gardens, redundant garages) - Conversions (commercial to residential) - Edge-of-settlement sites with community support
And critically, doing this with local supply chain partners and planning consultants means cost certainty, political awareness, and faster resolutions — all of which reduce your risk as a capital provider.
Traditionally, planning gain was captured by: - Major developers with large land banks - Speculative land traders (often high risk) - Housebuilders able to promote sites over 5–10 years
But smaller, agile developers — like OLD-Homes — can now capture this uplift through: - Smart site identification - Planning expertise - Community-first design
And here’s the key: they can offer third-party investors access to this value uplift through structured finance.
For example: - A loan-based investment might offer fixed interest (secured against the asset) - A profit-share structure might split the uplift proceeds post-planning
As an investor, you gain exposure to value creation without needing to become a planning expert yourself.
Plus, investing alongside an Oxfordshire-based team with in-house expertise, local contractor relationships, and trusted planning advisors significantly reduces execution risk.
Oxford itself is encircled by Green Belt — a literal planning firewall. Since the 1950s, these protections have made it harder to build new housing.
At the same time: - The university grows each year - Science parks expand - Infrastructure improves (East-West Rail, A34 upgrades)
Yet local councils often undershoot housing targets. According to the 2023 Oxfordshire Housing and Growth Deal Report, several districts deliver just 70–85% of planned housing.
This mismatch — growth without delivery — puts upward pressure on the value of sites that do secure permission.
That’s why OLD-Homes targets: - Sites adjacent to existing settlements - Properties with potential for subdivision or change-of-use - Locations in commuting range of science parks and hospitals
And why we always build around local insights, materials, and trades — to avoid costly missteps and add community alignment from day one.
Let’s connect this directly to your investment goals.
As a private investor, you’re looking for: - Capital protection - Attractive returns - Transparency and alignment
Planning gain offers all three — if managed well: - The asset’s value increases before construction begins - Uplift supports refinancing, resale, or development profit - Even if market softens, land with planning retains strong baseline value
And with OLD-Homes: - You’re investing alongside experienced developers - Projects are secured against real assets - Investment structures are designed to prioritise your capital - Local execution teams reduce delay risk, overspend, and planning mishaps
You’re not handing money to a distant firm — you’re partnering with people embedded in Oxfordshire’s fabric, politics, and planning process.
Planning gain is the unsung hero of development investing — and in Oxfordshire, it’s the difference between average and outstanding returns.
Want to see live examples of how this works?
Request our latest Planning-Led Deal Pack or book a 15-minute discovery call to speak with our investment team.
Next in the Series:
Residual Value, Benchmark Land & How to Know If a Site’s Worth It