Inherited a large property - how to sell for development?

chappers

I would step back a bit from this and reasses does the extra £30k, less expenses make or break either of your plans ? i.e can you still buy your house for £120k?

May you be throwing good money after bad ? i.e how likely are you to get PP for development liable to command a £300k plot price ?
You may spend £10k on getting PP for it to only raise the value by £30k is that worth it to you

How sure are you of the uplift that PP will bring? ie Have you spoken to any other EAs to get an idea of value with PP?

martinsurrey

There are so many options for this but I do think you need a helping hand.

the immediate options that spring to mind.

1) Sell for £240k now.

2) Apply for PP yourself, this could cost a fair bit - around £10-15k - then sell based on PP. Developers won’t really like this, as you will have made a lot of choices that they will be tied to (such as sizes, materials ect) so will limit the profit you can make

3) Get a specialist land agent involved and structure a deal with a developer where they pay all your fees for you to offer them an option to acquire the land subject to THEM getting planning permission. The price they pay to excise the option can be a set amount, or based on the number of dwellings they get planning permission for, or any other reasonable means (to be negotiated with developer/you/land agent), with a floor, so you don’t make less than OM. it can also include a long stop date, so if they don’t lodge a planning application within X months or succeed in planning within Y months, the option lapses, and then you sell on OM or offer another developer an option.

Fuzzyness

the option agreement provides less certainty than a conditional contract. if you're goign to involve land agents i'd at least make sure that the purchaser would buy the site once PP has been granted.

2) if you go for Outline PP you can specify the number of dwellings but leave everything else for future determination thus providing some flexbility for the purchaser to put their on mark on the development.

martinsurrey wrote: »

There are so many options for this but I do think you need a helping hand.

the immediate options that spring to mind.

1) Sell for £240k now.

2) Apply for PP yourself, this could cost a fair bit - around £10-15k - then sell based on PP. Developers won’t really like this, as you will have made a lot of choices that they will be tied to (such as sizes, materials ect) so will limit the profit you can make

3) Get a specialist land agent involved and structure a deal with a developer where they pay all your fees for you to offer them an option to acquire the land subject to THEM getting planning permission. The price they pay to excise the option can be a set amount, or based on the number of dwellings they get planning permission for, or any other reasonable means (to be negotiated with developer/you/land agent), with a floor, so you don’t make less than OM. it can also include a long stop date, so if they don’t lodge a planning application within X months or succeed in planning within Y months, the option lapses, and then you sell on OM or offer another developer an option.

RAS

I am stunned by the figures in your original post.

I found myself having to sell a house to pay care home fees.

The property was worth £x at most based on my preview of the local estate agents.

Then the opportunity came up to join up with the next door neighbour and garden grab. We could combine the two farthest halves of the long gardens and have access from the side road. This had already been done some years previously on the opposite side of the road.

I got a print out of the planning permisison for the other side of the road and paid £17.50 for the required local maps. Essentially I reversed the existing plan and made my own rough drawings. The actual outline application cost about £270 for two plots, although I had to provide a plan including the layout of the houses and driveways.

It passed first time. We sold the double plot for 150% of the value of the house, split between 2 sellers. Frankly I think the purchaser was barmy but....

We then sold the house for the same value as we first had in mind, plus a little bit because it also had some potential for extension.

Important things to note

If you live in a house and sell part of the property (like the building plots), there is currently no CGT to pay. If you sell without living in it or sell the house and then the plots, there is CGT to pay.

There is nothing to stop you putting in your own speculative outline planning permission whcih will cost very little. Drive round and look at small estates in the same area, get copies of their plans from the planning department. Talk to the highways people about access and if there is one to the local Parish Council as they will be the major objectors if you do not keep them in the loop.

Also bear in mind that all sorts of planning rules went to the bonfire in April 2012 and check out whether your local Council has actually readopted their new planning rules yet. If not, you will have a lot more room for manouvre.

Oh just to add that a previous attempt to do the same thing cost thousands in consultant fees and failed.

ValHaller

martinsurrey wrote: »

the immediate options that spring to mind.

.....

2) Apply for PP yourself, this could cost a fair bit - around £10-15k - then sell based on PP. Developers won’t really like this, as you will have made a lot of choices that they will be tied to (such as sizes, materials ect) so will limit the profit you can make

Developers will not be tied to anything other than what the council will tolerate, they can put their own applications in. A plot with planning permission for the wrong thing is far more valuable than a plot with no planning permission, because the principle of development has been accepted

antrobus

RAS wrote: »

....If you live in a house and sell part of the property (like the building plots), there is currently no CGT to pay....

Not necessarily. It depends on how big your garden is. I think the limit is about half a hectare.

confused3000 wrote: »

..
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"....

Put it for auction? If it really does have "development potential" then someone should be willing to pay for it.

getmore4less

Suprised by the numbers IIRC the planning consultants my parents used cost less than £2k.

planning_officer

Fuzzyness wrote: »

2) if you go for Outline PP you can specify the number of dwellings but leave everything else for future determination thus providing some flexbility for the purchaser to put their on mark on the development.

To a certain extent, this only applies if you wait until 1 February to submit the application! At present, you still have to submit quite a bit of detail regarding scale parameters of all proposed buildings, access points etc. Central Government is abolishing that at the end of the month.

Fuzzyness

i'm well aware of that but its highly unlikly he's going to submit an application in the next week.

chappers

getmore4less wrote: »

Suprised by the numbers IIRC the planning consultants my parents used cost less than £2k.

All depends on the project and we can only guess what the OP has in mind.
I have employed planning consultants on 2 occasions the first time it cost me £3K the second time £12k but for wildly varying projects and representations.