Inherited a large property - how to sell for development?

confused3000

Hi all,

I have recently inherited half of a property that has development potential and am looking for some advie on what to do next. Prior to this inheritance I have never owned a home or even managed to save a small deposit for a mortgage, so I have absolutely no experience of the property market.If all goes well, selling the property could set me and my fellow beneficiary up for life - we each hope to use our shares to buy our own homes mortgage-free! This is a once-in-a-lifetime opportunity for me and I'm anxious to get the best possible price for the sale!

I'd be so grateful for any advice you could give me.

About me:
So, I'm currently renting and have no assetts or savings whatsoever, and a little bit of debt too. My fellow beneficiary has a mortgage with their spouse for 50% of a home - a housing-association for somesuch owns the other half. Neither of us are used to having money and are completely unprepared for this situation.

About the property:
It's a large bungalow in about an acre of land. Estate-agents value it at about £240,000 as-is, with no planning permission. However, every estate agent we have spoken to talks about "development potential". So far, only one estate agent has come up with a proposal (destorying the bungalow and applying for permission to build 6 smaller ones, upping the value of the sale to £300k - the esate agent apparently has contacts with council planning and several interested builders). Another has recommended that we contact the council planning department directly and ask them to come out to see the property and give us an idea what sort of planning permisson they might allow.

So, what's the best way to proceed from here? Is it wise to talk to the council myself, or should I speak to more estate agents? Should I approach developers directly? Should I seek independent adivce, and if so, from whom? I'm completely lost and desparate not to screw this up!

Many, many thanks!

Thrugelmir

Do you have funds with which to fund your scheme?

confused3000

I don't have a "scheme" yet. I'm thinking to apply for planning permission and then to sell to a developer, not to finance the development myself. I want to get out as quickly and profitably as possible and if I have to get a loan for £10k or something like that to fund all the paperwork that's fine, but I can't fund a development and wouldn't know how to begin anyway.

Thanks for asking - sorry if I didn't make it clear enough.

ValHaller

Take your time and investigate property consultant and chartered surveyors. Don't jump into bed with any of them until you understand what they are offering and you are confident that it is a fair deal.

To find likely companies, google on building plots for sale.

olias

!st thing I would say is don't get greedy! There may be tax implications if you increase the value of the property once in your ownership. What happens if you apply and are refused? Will that then make the property less desirable and so possibly worth less than its current value?

One option is to sell as is, but with a development clawback clause - ask your EA to explain this.

Olias

planning_officer

Don't rely on an estate agent to contact the Council's planning dept. Estate agents mostly know nothing about planning and will quite happily advertise a property as having development potential, even if it has none whatsoever - just because they don't understand planning policy. I would go yourself to the Council and seek some initial advice - although there may well be a charge for this and you will probably need an idea of what you want to do. If you don't want to go yourself, then find a good architect or planning consultant, but don't use a developer or estate agent!

Where is this bungalow? If it's in the Green Belt, you can forget about ever building houses in the garden, and only a limited extension would be possible. To be honest, if it's in a rural area (even if it's not in the Green Belt) it's unlikely that any Council would look favourably on a scheme for multiple houses.

Initially, I would look at the Proposals Map on your Council's website - find the site and it will tell you any land designations that apply - Green Belt, AONB, urban area, etc. That will give you an idea of the potential for future development. Happy to help further, if you have any specific info on the type of location it's in.

confused3000

Thanks all very much for your responses and private messages.

To answer the questions about the bungalow:
The bungalow is at the edge of town. It's on a large residential street with other bungalows on its side of the road, along with a pub and a mechanic further down, and on the opposite street it's standard 2-storey semi-detached houses. The bungalow, however, backs onto fields. The plot of land immediately behind the bungalow is used for keeping 2 small horses.

I'm planning on phoning the council planning department for an informal chat tomorrow.

The estate agent that we spoke to says that they have also made informal enquiries (we never asked them to!) and have heard back that there may be an opportunity to develop up to 5 bungalows on the front of the property - where the current bungalow faces the road, but that there are restrictions on 'backland development', meaning that the large garden probably couldn't be developed on. The estate agents reckons we could be looking at £300k if the land was sold with their help, with planning permission, to a builder or developer.

However, I don't feel that we've looked at enough alternative options yet to jump into bed with anyone. Numerous people have recommended speaking to solicitors, property consultants, land agents, surveyors, financial advisers and architects. I would definitely like to speak to someone who I can be sure has our best interests in mind as his/her clients, rather than an estate agent who stands to make money at both ends and doesn't necessarily have an incentive to get us the best possible deal for ourselves.

Can anyone give me some advice about which sort of professional I need to speak to and how to choose one please? I'm completely lost!

teneighty

As others have suggested try talking to your local plannng dept. However (sorry planning_officer, I'm sure you are the exception) most these days are a complete waste of time and will not discuss informal proposals. You have to virtually submit an application with a fee before they will even tell you if you need an application or if your proposal is likely to be supported, at least that's how they all operate in my areas of operation.

My next step would be to talk to some local architectural designers. Most will provide a free initial consultation and if they have been submitting similar schemes they should have a pretty good idea what will be acceptable. If you are not sure which firm to approach do some research to find similar small developments and then look up the planning application to see who the designer was.

If it looks feasible you have a number of options. Funding a planning application for a small development will be quite expensive but if successful will increase the value of the site. However it is quite common these days to sell/agree an option to a developer and let them sort out the planning. But I would suggest you engage your own professional advisor rather than just being at the mercy of the developers.

I have to say, large plot on edge of established built up area with open fields to rear does not sound very encouraging for planning. I bet they'll query the proposed density.

Good Luck

googler

confused3000 wrote: »

I'm planning on phoning the council planning department for an informal chat tomorrow.

Can anyone give me some advice about which sort of professional I need to speak to and how to choose one please? I'm completely lost!

Look in Yell or paper Yellow Pages for planning consultants and/or architects in your local area.

Look on your council's website at previous planning applications which have been accepted for similar developments to what you might do with this site. In particular, look for any 'agent' acting on behalf of the actual applicant. This agent will usually be some kind of planning consultant or architect, and the fact that they've been involved in previous successful applications bodes well.

Phone some or all of them. Have a chat. See if you can get an appointment, free of charge, for a more formal chat. If one or more of them impresses you enough, discuss terms of business and see about hiring him/her/them.

planning_officer

Good advice from the above two posters. I would definitely recommend seeking the input of a planning consultant, as it sounds like the main issues will be the density of the housing and where they are on the plot, rather than their detailed design. A planning consultant should be able to look up local policies and constraints and advise you best. I say 'should' as there are still some dreadful planning consultants around. We have one in our District who seems hell-bent on submitting applications for new rows of dwellings in the middle of fields and acts surprised when they're all refused and dismissed at appeal!

Also, bear in mind that if this bungalow is at the edge of a settlement, increasing the density of dwellings on the site may not be something the Council is going to look favourably on. Many towns and villages have more dispersed plots and buildings as you near the surrounding countryside, and that's part of their character. Anything completely out of character is unlikely to be viewed favourably. This may not be an issue here, but just some food for thought. Also, I wouldn't trust this estate agent's view, particularly as he seems to have gone behind your back in seeking advice - I'd be very surprised if he had asked the Council, it's more likely he's gone to a planning 'friend', who may not be that familiar with local policies.

If you phone the Council for a chat, at least ask them which policies of their Local Plan or Local Development Framework would apply to this site - that will give you a good grounding of the main issues as you can then read those policies on their website.

teneighty is right above, in that most planning departments now charge for informal advice. That's only because providing informal advice is not a statutory function of a Council and they are not obliged to offer that service (unlike actually determining applications, which of course is a statutory function). It's unfair when the general taxpayer in effect ends up funding private developer's requests for pre-application advice (i.e. officer time and resources). It's actually fairer for the people who use the informal advice service to pay for it. I agree that some Councils are unnecessarily onerous in their requirements for detailed information at the pre-application stage, however a certain level of detail is needed, otherwise the advice someone gets back will be very general and in some cases, pretty worthless.

getmore4less

Remember this could take time, my parents to over a year to get planning to build on their plot and it was complicated by every ajoining property putting in objections.

Previous plannning by a developer had 6 properties on the plot but due to developer going bust and change of access road only 2 were permited, one getting built.

As you rent it might make sense(if convenient and habitable) for you to move in, that will keep the place OK just in case you can't get planning and have to sell as is.

Also being local will give you a better chance of understanding the potential.