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Thread: Selling land for development

  1. #1
    Master dickbrowne's Avatar
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    Selling land for development

    Evening all - I'm looking for some advice, if anybody has relevant experience.

    Mrs. B and I have a decent sized garden (way too big for me to look after - I'm garden-phobic).

    Now that Browne Jr has grown and will soon be flying the coop, we're thinking of downsizing, but before we do, we'd like to carve off a portion of the garden and sell it to a developer.

    It is, as I've said, a decent size, and the part we would sell off is big enough for a 3-4 bed house, with parking and garage to the front and a good sized garden to the rear. We over-look common land and the road is (apparently) very desirable. Properties here are significantly more costly than anywhere else in the town, which is itself quite pricey compared to the rest of the immediate area.

    The plot has good access to the front, so that's not an issue and I am informed that the land has previously had planning for two houses. We've lived here for almost 18 years, and it was before we moved in, so that may well not be relevant, it's certainly lapsed by quite some time.

    There does appear to be allowance for two houses between us and next door - we are number 94 and our neighbour is number 88.

    We've been approached many times over the years by developers wanting to buy the land, but always responded in the negative. Recently we've had two approaches, both of which have been from companies who gain the planning on the land and then help to market it, taking a significant slice of the profit above the nominal value of the land without planning.

    Given that planning should be relatively easy (and inexpensive), and marketing can be handled by local estate agents, what would you do?

    I'm not sure that I want to enter into a co-sell agreement as outlined above, and I don't want to build a house myself (not actually build it myself, but handle the build, if you see what I mean), so other than contact a local architect to assist with planning, are there any other options I've missed?

    The other things I'm not sure of are the tax implications of selling land I own and the best way of marketing it - is the local agent route a good one, or are there websites or services which specialise in this kind of thing?

    Any advice or experiences would be most welcome - if you'd rather not discuss things openly, PM would be great, or maybe even a telephone call, if you're happy to provide a number.

    Thank you for reading this far

  2. #2
    Master
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    A straightforward sale of part of your “principal private residence” should be tax-free as the sale of the whole property and grounds would be.

    Anything more complicated might give rise to some tax.

    I found this which might give you a few ideas:

    https://www.krwaccountants.co.uk/krw...velopment.html

    I’d suggest that you try and find an accountant who is familiar with similar activities and have an initial chat to scope the issues ahead of commercial discussions.

  3. #3
    Id suggest you get a local estate agent round, one that you know has a good record of selling houses on your road and ask them what would maximise the value of your plot, two small houses, or one large.

    Then commission an architect or architectural technician to draw up some plans for planning purposes only.

    Seek planning approval then sell the land with planning then sell.

    Your other option is to try and build yourself, if you can afford to. That way you can chose your builder, and more importantly design the exact look of your neighbouring house as leaving it to someone else may not deliver the neighbour you desire.

    A colleague is currently doing this at the moment with two properties on his plot. He has a large Victorian Farm house/villa and wanted to make sure the two new houses on the plot were in keeping with the look of the main house and gardens. Leaving it to a developer, might not design or build something that’s sympathetic to your existing home and surroundings.

  4. #4
    Master
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    Quote Originally Posted by chrisparker View Post
    Id suggest you get a local estate agent round, one that you know has a good record of selling houses on your road and ask them what would maximise the value of your plot, two small houses, or one large.

    Then commission an architect or architectural technician to draw up some plans for planning purposes only.

    Seek planning approval then sell the land with planning then sell.

    Your other option is to try and build yourself, if you can afford to. That way you can chose your builder, and more importantly design the exact look of your neighbouring house as leaving it to someone else may not deliver the neighbour you desire.

    A colleague is currently doing this at the moment with two properties on his plot. He has a large Victorian Farm house/villa and wanted to make sure the two new houses on the plot were in keeping with the look of the main house and gardens. Leaving it to a developer, might not design or build something that’s sympathetic to your existing home and surroundings.
    If I’ve read the OP correct, then they will be moving after selling the land so I guess the design of the new house(s) wouldn’t be an issue.

  5. #5
    Grand Master oldoakknives's Avatar
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    Quote Originally Posted by dickbrowne View Post
    ......................
    We've been approached many times over the years by developers wanting to buy the land, but always responded in the negative. Recently we've had two approaches, both of which have been from companies who gain the planning on the land and then help to market it, taking a significant slice of the profit above the nominal value of the land without planning.

    Given that planning should be relatively easy (and inexpensive), and marketing can be handled by local estate agents, what would you do?..................
    If you think it's going to be that easy to get planning permission and market it, then go ahead. It's a relatively small development so might be relatively easy.

    How much do the planning consultants want, 20%? Is it worth it for sitting back and letting them do the work?

    From experience of a 13 acre site, such planning consultants can be invaluable for their knowledge and expertise in securing planning permission.

    But it's your call if "Given that planning should be relatively easy (and inexpensive), and marketing can be handled by local estate agents"
    Started out with nothing. Still have most of it left.

  6. #6
    Go online to your councils planning department, they should have some history of what was applied for previously. If you can get the original plans back, re submit them, get planning and then put the Land with planning into a well respected property auction. Every estate I agent I know has a developer in their pocket who will surprisingly (not) wind up with your land after the agent sells YOU the buyer and doesn’t have your interest at heart. Stick it into an auction and it will realise it’s full potential as you have self build builders, development companies etc all looking for the next project and happy to pay the full market value for the land.

  7. #7
    Craftsman
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    Without reading the above comments........I use to work as a estate agent many years ago.

    Get a few estate agents round and ask them.......

    1. what is the property worth as it is.....

    2. What type of property would be most desirable?

    3. What would the land be worth with planning???

    4. What is the house worth once the land has been separated???

    Sometimes after the above has been taken into context alot of vendors just try to put a extra margin on the property and sell it as it is with "potential" planning permission due to the complications that arise with planning and red tape.

    By no means is my advice complete. Its more a basic guideline to get your thoughts in the right direction.

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  8. #8
    Master
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    As said above, work out what's best, one big house or two smaller ones. Ask the local planning officer for his advice too. Then, draw up plans, get permission then sell. Unless you're experienced in such things, I wouldn't try to develop the site yourself.

  9. #9
    Craftsman
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    What Yeti said .


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  10. #10
    Craftsman
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    I would qualify by saying most auctions have a 28 day completion dead line , if you make it an extra 14 day it gives self builders time to get financing in order , if they renege you keep the deposit .


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  11. #11
    Craftsman
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    Selling land for development

    I did exactly this over a decade ago .
    I discussed my thoughts and aspirations with the with local Planning Officer & sought advice as well as their “ local knowledge indications “ it is vital to have them on side as they are invaluable , with knowledge , tips and best practice advice and it is relatively straight forward process once you are taught how .
    I made an application for outline planning for a single detached dwelling ( no detail required ) .
    Submitted this and it was passed at the planning committee meeting , where I attended and presented my case in person .
    I have no formal training and did not seek any advice from architects etc , to save on expense in case it was felt it was a non starter .
    After I gained OPP I appointed a local respected estate agent and they marketed the plot via a sealed bid sale ( 6 week window ) .

    Various clauses were set by me re fencing making good any access , damage etc etc .

    Payment within 6 weeks of decision of acceptance if not the option to purchase went to the next highest bid .

    This all went as well as I had hoped , the plot fee was split between my 2 children who used it as a deposit on their first homes .

    One caveat ... I’m not sure re CGT as I recall this changed the year or so after I sold the plot .

    My advice is to go for it , but get a friend in the planning office that covers your area of residence ,and do not get too detailed for a start ( 1x 2 storey dwelling or 1 x 1.5 storey etc etc ) .
    Good luck . Oh & just one other thing , if you intend to stay or not as maybe , let the neighbours know ... saves a lot of animosity and poison pens / key boards !



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    Last edited by Norbert; 28th July 2019 at 20:31.

  12. #12
    Journeyman
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    Hi

    May I suggest that you first apply for pre-planning application advice/enquiry with your Local Planning Authority - this is usually 100£ and puts in writng from the LPA what their view would be to a formal application - outline or otherwise. It includes compliance with policies etc. or not and what will need to be addressed, including access/highways matters, in writing so you have something to work to.

    You dont need an Architect/Planning Consultant at this stage but it will be helpful at the outline application stage. Fancy ones tend to cost more and still dont provide the necessary - even though they know what LPA's/Local Highways Authorities etc. need as a minimum - parking standards changed down my neck of the woods many years ago - but even fancy drawings still have the old standard dimensions - I suppose the customer pays for any revised plan......

    The fact you had a PP a long while back is probably irrelavant now as Local Plans, Policies and like change or are updated.

    Questions - feel free to ask.

    L-K

  13. #13
    Grand Master Glamdring's Avatar
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    Personally I'd love it if you were able to sell it without breaking it up so that someone who does have a love of gardening can make full use of it. There are far too many Lego houses currently being built in the UK.

  14. #14
    Master
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    I've not done this, but we are in the process of moving to a house where the previous owner did this in coordination with a builder and he seems to have done rather well out of it. He was smart in ensuring that the houses built in the substantial plot were high end detached, which resulted in his house increased significantly in value. Had he sold the house and the land together "as was" then I don't think he would have realised much more than what we paid for the house alone.

  15. #15
    Quote Originally Posted by Glamdring View Post
    Personally I'd love it if you were able to sell it without breaking it up so that someone who does have a love of gardening can make full use of it. There are far too many Lego houses currently being built in the UK.
    Nice idea but subsequent owner could develop the land. Better the OP here benefits if anyone.

  16. #16
    Master Maysie's Avatar
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    My advice would be to get pre-app advice as mentioned above and if positive, then proceed to get outline planning permission yourself using a local architect (& planning consultant if required).

    Assuming the permission is granted, you can then offer the house with first refusal on the plot (sold as a whole but valued separately) to the house purchaser, you can still sell the plot separately if the house purchaser does not want it. Selling your house with PP on the back garden may scare some of the potential house purchasers off, but giving the house purchaser the opportunity to influence the detailed planning permission on the plot adjacent to their home may be seen as beneficial to them, even if they sell the plot off in the future.

  17. #17
    Master
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    Quote Originally Posted by dickbrowne View Post

    ....It is, as I've said, a decent size, and the part we would sell off is big enough for a 3-4 bed house, with parking and garage to the front and a good sized garden to the rear...

    Bloody hell Richard my garden looks crowded with a bench and a pot-plant. Green is not a good colour on me.

    Sorry, I can't actually add anything to your thread.

  18. #18
    Craftsman
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    Do think about the implications of trying to sell your house if a developer has moved in next door and is creating merry hell, especially if the buyer of the plot decides to cram it with shoeboxes (regardless of what you obtain planning for) - not great from a marketing perspective.

    It may be better to get the outline consent for the additional dwelling and then sell the whole lot (inc. your house) to a developer.

  19. #19
    Master
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    Are you still relatively close to Uxbridge Richard?
    I may know of a couple of developers if so.

  20. #20
    Master
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    It’s going to make selling your remaining house difficult until the new plot is developed, no one is going to want to buy next to an undeveloped plot, not knowing whether they will have a single house or a dozen flats springing up next door.


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  21. #21
    Master dickbrowne's Avatar
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    Hi everyone, thank you for the feedback - some food for thought. Selling the plot as a whole may be possible, but the fact is that the purchaser may well sell the land off to help pay for the house - the garden is around an acre, so taking half away will still leave a good amount, and with the setting (overlooking common land and rivers) contributes to the feeling of openness.

    We're planning on being here for three or four years yet, so the development will be definitely be complete by the time we sell and move. This is a contribution to the pension pot and as such, we find it valuable - it could give me a good four or five years worth of retirement before touching savings. The negative effect on the value of the house is very small in comparison.

    We have an agent coming around tomorrow and it looks like he's going to suggest that we sell the land by tender, post planning approval, to maximise the return, and I will absolutely suggest a longer time to complete to give self-builders a chance, which is likely to result in a more attractive house next door, compared to a developer who will maximise his profit.

    Pre-planning is a really good idea and we will definitely go down this route before committing to the cost of actual planning. Offering the house with an option for the larger plot is also a good idea - it's dependent upon timing really, but we will look at this option.

    Dave, we're in Newport Pagnell - near to Milton Keynes, so not that close to Uxbridge, but not that far away either.

    Oh, and Kev - I think I was in your shop a couple of weeks ago, but you weren't there!

  22. #22
    Quote Originally Posted by dickbrowne View Post
    Hi everyone, thank you for the feedback - some food for thought. Selling the plot as a whole may be possible, but the fact is that the purchaser may well sell the land off to help pay for the house - the garden is around an acre, so taking half away will still leave a good amount, and with the setting (overlooking common land and rivers) contributes to the feeling of openness.

    We're planning on being here for three or four years yet, so the development will be definitely be complete by the time we sell and move. This is a contribution to the pension pot and as such, we find it valuable - it could give me a good four or five years worth of retirement before touching savings. The negative effect on the value of the house is very small in comparison.

    We have an agent coming around tomorrow and it looks like he's going to suggest that we sell the land by tender, post planning approval, to maximise the return, and I will absolutely suggest a longer time to complete to give self-builders a chance, which is likely to result in a more attractive house next door, compared to a developer who will maximise his profit.

    Pre-planning is a really good idea and we will definitely go down this route before committing to the cost of actual planning. Offering the house with an option for the larger plot is also a good idea - it's dependent upon timing really, but we will look at this option.

    Dave, we're in Newport Pagnell - near to Milton Keynes, so not that close to Uxbridge, but not that far away either.

    Oh, and Kev - I think I was in your shop a couple of weeks ago, but you weren't there!
    Just as a final piece of advice. You don’t say if it is a residential or commercial estate agent you have coming round. I’ve very rarely seen a development plot on a residential estate agents books. I regularly look at commercial agents for projects etc and would recommend you use one of these as they will by far achieve the best price. Il say it again, imo using a residential estate agent will most likely result in the plot ending up in their preferred friends/developers hands.


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  23. #23
    Master dickbrowne's Avatar
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    Thanks Yeti - I hear what you're saying, and I plan to talk to various agents - I will certainly have at least one commercial agent on the list

  24. #24
    Master
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    Quote Originally Posted by Yeti View Post
    Just as a final piece of advice. You don’t say if it is a residential or commercial estate agent you have coming round. I’ve very rarely seen a development plot on a residential estate agents books. I regularly look at commercial agents for projects etc and would recommend you use one of these as they will by far achieve the best price. Il say it again, imo using a residential estate agent will most likely result in the plot ending up in their preferred friends/developers hands.


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    I’m confused. Why would a commercial estate agent list a residential plot?

  25. #25
    Master Mouse's Avatar
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    Quote Originally Posted by jaytip View Post
    I’m confused. Why would a commercial estate agent list a residential plot?
    Because that's where developers will look.

    Just guessing :-/
    Last edited by Mouse; 31st July 2019 at 05:43.

  26. #26
    Master
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    The popular option is to fund the new build, sell the current home and live in the new one for a couple of years as that maximises the tax free profit.
    Whatever you do, take some tax advice before making any big decisions rather than after. Sounds a nice dilemma to have

  27. #27
    Master
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    Quote Originally Posted by deepreddave View Post
    The popular option is to fund the new build, sell the current home and live in the new one for a couple of years as that maximises the tax free profit.
    Whatever you do, take some tax advice before making any big decisions ....
    Taking tax advice is definitely a good idea.

    Moving into a property for the purpose of making a claim for “Principal Private Residence” relief should be approached with caution. There are technical issues - in theory, at least. From memory S224(3) Taxation of Chargeable Gains Act, I think. Quality of occupation is what matters rather than quantity.
    Last edited by David_D; 31st July 2019 at 11:21. Reason: Wrong section number!

  28. #28
    Quote Originally Posted by jaytip View Post
    I’m confused. Why would a commercial estate agent list a residential plot?
    Don’t give up the day job any time soon..


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  29. #29
    Master
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    Quote Originally Posted by David_D View Post
    Quality of occupation is what matters rather than quantity.
    This is easily and often misunderstood by the layman (and some accountants) as the majority of cases are straightforward. It needs to be occupied as your genuine home with a sufficient degree of permanent intent (to stay there, meaning it can't be considered temporary).
    There's no specific definitions so each case on its own merits but there are tax cases and HMRC guidance that provide enough certainly if you know them.

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