Delayed Completion Strategy
A delayed completion is a legal agreement where contracts are exchanged to lock in a purchase price, but the actual completion (handover of funds) is pushed back by several months or even years.
Delayed completion is a powerful creative finance strategy used by property developers to control an asset and secure planning permission before actually paying for it.
The developer agrees on a purchase price with the landowner and 'Exchanges Contracts', putting down a small deposit (often 5% or 10%). However, instead of completing the purchase 28 days later as is standard, they negotiate a 'Delayed Completion' date 12 to 18 months in the future.
The Planning Uplift
During this 18-month window, the developer applies for enhanced planning permission on the site. If successful, the land value rockets. The developer then completes the purchase at the originally agreed low price, instantly capturing the massive planning uplift as pure equity, and uses that increased value to easily secure development finance.