I have a bit of land, and I'm thinking of building a house. Good idea?

MrMattyP

Hi

I have some land at the back of my house. Not loads, but enough that it would be possible to build another property on. Given the layout, this could then (in theory) be sold.

Given the current financial climate, and the housing market in particular, would it be cheap to build a house? I got some quotes a while ago, but has "the crunch" changed things much?

Would it be lucrative to build it and rent it out until such time the property market picks up? (Has the rental market died off too?). And then sell it off?

I feel like this is a good option for me, but have the sneaking suspicion that I've oversimplified the matter, and I'm missing something glaringly obvious.

Any advice would be much appreciated.:o

Thanks.

M

gar123

do you have the cash to build now is a good time to negotiate anything but builders may be busy with renovations, perhaps call a builder and ask them to give you a speculative quote and then see if it is worth the investment


good luck

brightonman123

i would sell/lease land out, and let someone else have the worries-

be sure to set some maximum size/height of any building, and a time limit for completion!

angelboy

Check your in box - PM sent

G'Meister

Does it have road access or would you need to build a driveway past yours and your neighbours homes? That sort of thing usually puts a big dampner on getting Planning Permission.
As for whether it's the right timing, if you have the money, it's fantastic timing - builders trained to build homes are being laid off left right and centre and although alot of them were from Poland and have headed home (the Polish government has offered them financial incentives to do so, and their economy is doing very well), forget all that I'm imparting too much and saying too little, there's plenty of builders out of work, you'll be able to negotiate good prices as supply is greater than demand.
I would recommend building flats instead of a family home, this makes it much easier to rent them out, unless it would be small enough to be an affordable family home.
I'd also recommend strongly you pay for the best legal advice in writing contractual agreements with the building company you employ; don't employ individual builder's you don't have the expertise to oversee the job, find suppliers etc. It is imperative that your contract with them is very explicit about what you want (knowing what you want helps, too - don't ask them, they just want to profit). If you don't make it explicit in the contract, not just verbally, the level of build quality you are expecting, the quality of the finish, etc, you're leaving the door wide open for them to cut corners and they most certainly will take that opportunity, as I have seen in many newly built properties.
This is all dependent on you being able to afford without borrowing from banks to complete this project, if you cannot then I would follow others advice and sell the piece of land to someone else, or wait.
By the way, your questions about the current housing market are badly thought out - a project like this in it's infancy may take another 24 months to complete.

Good luck

PasturesNew

There was a developer on Homes Under the Hammer this week who bought some land wtih Planning Permission on it, he then tried to change that PP and during the time he was doing that the market changed.

He decided not to build a house that nobody would want to buy. He commented that the profit is in the NEWness of the house, so it wasn't an option to build it and rent it out for a few years then sell it. That was his opinion when faced with what you are... it's better to wait he thought.

It would be impossible to calculate what you should do with your plot in your road/town because there are so many variables involved.

Debt_Free_Chick

First off .... what does the Local Development Plan say?

What's the Local Development Plan? Its a document that sets out those situations - including yours - that are likely to get planning permission. More importantly, it sets out those that are unlikely to get PP. If you fall into this latter category, you have very little chance (if any) of getting PP for the development. If you do fall into the development criteria, then there are still other criteria to consider such as access etc.

Go to your local Council website and read the LDP. If you want to disclose the Council, we can look to see if it's online.

Gary_Connor_1955

If you can afford it, building now is a good idea. Builders are desperate for work and so will welcome a 12 month project!

m1ntie

I would suggest that you make an appointment to go in and have an informal chat with your local planning officer. He/She will be able to tell you what is likely to be possible.

MrMattyP

Gnomemeister wrote: »

your questions about the current housing market are badly thought out - a project like this in it's infancy may take another 24 months to complete.

Hi Gnomemeister

Thanks for the advice. :cheesy:

Not sure if I've done the quote thingy correctly here, but my thinking with this was that by the time the project is complete, the market might be on the turn. Obviously it's all speculative, but from the talk I've heard, "they" expect the downward trend to go on for a year or so.

Therefore, I could potentially be looking at prices beginning to improve when I'm looking to sell. No?

M

GDB2222

MrMattyP wrote: »

Hi Gnomemeister

Thanks for the advice. :cheesy:

Not sure if I've done the quote thingy correctly here, but my thinking with this was that by the time the project is complete, the market might be on the turn. Obviously it's all speculative, but from the talk I've heard, "they" expect the downward trend to go on for a year or so.

Therefore, I could potentially be looking at prices beginning to improve when I'm looking to sell. No?

M

Nobody knows, but in the last house price recession prices dropped for 3 years, then remained steady in nominal terms for another 4 years. (Nominal terms means prices stayed the same, but were reduced in value by inflation.)

It seems to me that this is probably a great time to get builders to build it, but it's going to be hard to sell. When prices pick up, whenever that is, you'll be able to sell it, but builders will be harder to get. Catch 22 in action.

You can't really lose by asking about planning permission, having some preliminary discussions with an architect, and talking to some builders about building costs. Before you actually commit yourself, though, you obviously need to make detailed costings and you should allow for house prices to fall by at least 25% from present levels.