General "value" of planning permission?

Strapped

I know that when it comes to property, the "value" of something is what someone is prepared to pay. Having said that...the property next door to us has just been put on the market. It has full detailed planning permission for demolishion and rebuild. Property was purchased in Apr 2007 for £210k. It's on the market now for £250k!

We might have been vaguely interested in purchasing but not at that price. We would not want to develop what they gained PP for, but something much more modest (bungalow for my mother plus the opportunity to play with the boundary between us and them - their property is actually on what used to be the garden of this place and we only have a courtyard plus a tiny raised strip at the side).

Personally, I think they're barking if they think they will get £250k as the site is small and sloping and is being advertised as having views - unfortunate, as we just put a large fence :rotfl:. But am I mistaken - does having PP really add that much value to a site?

Was thinking more like £200k max?

Doozergirl

It depends on the size of the property they have permission for - it's totally dependent on the end value of that property.

I don't know what is there now, but if the end value of the house is £210k now then the eventual property must be at least twice as expensive (and therefore much larger) as you have to warrant the build cost.

Knocking the house down and rebuilding a small bungalow and increasing your garden land would not be 'profitable'. It would cost at least £100k to build a new house. If it were smaller than the existing house then it's totally pointless.

00ec25

Strapped wrote: »

- does having PP really add that much value to a site?

PP for what??????????
- increased density infill development - 3 shoeboxes @ £150K each in the space previously used by 1 house???????
- "executive" house instead of what was there before?????

If the site is being marketed at more than the existing property value (which itself may or may not need money spent on it to refurbish/modernise) then it implies it is for the serious developers market who will know how to squeeze max density out of small spaces and can foot the costs of demolition.

Forget the fact you put a fence up, I'd be rather more worried about what may be go up next door if I lived there ! Every day I drive past a site previously occupied by 3 x 4 bed executive homes (£400k each) which is now two x 3 storey designer blocks of luxury apartments with 10 flats per block, all now sold off plan at around £200k each, thats £2.8 million gross profit before costs of course

I assume the only reason they got planning persmission is it was done a long time ago as they are neitehr affordable housing nor in keeping with the character of the area which remains large detached houses

Strapped

The current building is a small concrete 2 bed bungalow which would require a lot of work to bring up to modern comfort standards. They have planning for a large 3 bed "executive stylee" house with 2 parking spaces + stamp sized garden. It was granted on 2nd application with some restrictions. There is a 3 bed detached stone cottage available currently in the village for £350k, for comparison (with garage and big garden).

And yes, of course we're worried about what may go up as presumably any purchaser may apply to ammend the plans and it all starts all over again...

ETA: Doozergirl, we realise it may not be "profitable" exactly, but there is a value to us in controlling what does get built there, and as we are looking around for a bungalow for my mother anyway, it could be a solution (at a price).

GDB2222

You can't really complain about the proposed garden size, as that is what you have now. On a general rule of thumb, take the land as 1/3rd of the value of the final building. So, guessing £450k when built => land is worth £150k. However, somebody who is keen on building their own house might pay much more than that, I guess.

northerner79

To get the value of the site you would need to do a residual valuation.

Effectively you start with the end value of the completed house, then subtract cost of the build, finance, professional fees and other fees, take off a profit margin for development which leaves you a land value!

Strapped

GDB2222 wrote: »

You can't really complain about the proposed garden size, as that is what you have now.

Huh? Who's complaining?

GDB2222

Strapped wrote: »

GDB2222 wrote: »

You can't really complain about the proposed garden size, as that is what you have now.

Huh? Who's complaining?

I thought your reference to stamp-sized garden was expressing disapproval.

Strapped

GDB2222 wrote: »

Strapped wrote: »

GDB2222 wrote: »

You can't really complain about the proposed garden size, as that is what you have now.


I thought your reference to stamp-sized garden was expressing disapproval.

It was in comparison to what else is currently on the market in the village, suggesting a ball-park figure for the finished development.

middlecat

I just went to see a 2.5 bedrooms property in Earlsfield auctioned by Savills. The house was sold for £250k in Sep 2008. After planning permission for loft and rear extensions were gained, the property is now back on the market in auction with a guide price of around £400k!

Oh and here is the most interesting bit: The seller even wanted the buyer to cover the cost of the HIP!