Land Value

Jeffrey_Shaw

Best way forwards is to tell developer (D) that you require his solicitors to give yours an unconditional undertaking that they will pay all your costs, whether or not D proceeds. Only then instruct:
a. your Chartered Surveyor to begin valuation process; and
b. your solicitor to enter negotiations.

So you do NOT do anything that'll cost you unless/until that Undertaking appears.

bag112

Thank you all for your quick responses.

I think the advice to get expert help is the most crucial one - it's obviously not a simple matter. And Jeffrey that makes total sense to get agreement on them meeting all costs before we do anything further. I have just been told by a friend of a friend that as a rough guide I should work on the total land value being approximately a third of the Gross Development Value which makes sense. That would give me a figure for the total land, which includes my neighbours, and I appreciate that after getting expert advice this may change but it gives me a rough idea as to whether it's something we might want to pursue.

The piece of land involved is small in relation to our garden - probably an eighth if that. It's currently a very overgrown vegetable patch. The loss of value to our house is likely to be minimal (although I would obviously get that confirmed) and the area involved is well screened from our house by tall, established trees within our boundary so I'm not concerned about the impact a development may have on us (plans are for a single five bed house).

The only other thing that I've thought of is how it might affect our mortgage. I assume the mortgage company would need to know. What action would they most likely take. Our mortgage is probably about 50-60% of the value of our house and we are on a fantastic rate at the moment which we would be mad to change from unless absolutely necessary. Could they change our mortgage terms?

Jeffrey_Shaw

The mortgagee (lender) would have to be asked to consent and, ultimately, to release the sale area from mortgage.
It might charge you:
a. an application fee;
b. a valuation fee;
c. a Deed execution fee (form DS3 to discharge part, probably); and
d. a lump sum to reduce the mortgage debt to a lower figure commensurate with the reduced value of the retained land.

The Undertaking [see above] has to cover items a/b/c.