buying a house which might get demolished if heathrow gets a third runway

Sunny2good

We have seen a property in West Drayton which we really love. It's going to be our dream house and we can see ourselves living there forever. However it's in an area which is in the proposed north west expansion of Heathrow third runaway. If the plan goes ahead and heathrow is chosen to be expanded in North west, then this house among 800 others will be demolished.

Heathrow promises to pay 25% + market price and your stamp duty plus legal fees for new house. Just wanted some advice as to what you would do in such a situation when it's not clear whether an expansion would happen(I think a decision will be made next year out of 3 possible options). demand for property is very high though as lost of people have put in offers already but less than asking price. Shall I avoid or buy and get a 25% return incase runway does go ahead?

On a separate note, A colleague recently bought a house in the area and their solicitor did not warn or mention the expansion plans and that their house can likelybe demolished, are they not legally required to do so. Maybe not as no plans are confirmed yet?

PasturesNew

You need to consider a mortgage-provider's perspective. If you bought it and got into trouble, there's the chance it'd sell for a lot less than you paid. You, yourself, might get stuck in it if you couldn't live there any more/had to move for a variety of unexpected reasons.

If you're paying cash, it's your choice, but you're really tying yourself into that property, potentially, "for life" .... the discussion could drag on another 50 years and you might find yourself having to move "in a hurry" and take a hit.

If you're paying cash and you're SURE you'd never HAVE to move, then consider it. A lot of your "competition" could be BTL LLs who will just rent it out, so can hang onto it.....

davidmcn

Sunny2good wrote: »

Heathrow promises to pay 25% + market price and your stamp duty plus legal fees for new house.

"Market price" could be a rather hypothetical concept and up for debate (the market price of a house in West Drayton pretending that Heathrow was never going to be expanded?). Don't presume a 25% "profit".

Bear in mind whether the compensation would actually buy you something similar in the area (if the non-blighted properties' values go up).

On a separate note, A colleague recently bought a house in the area and their solicitor did not warn or mention the expansion plans and that their house can likelybe demolished, are they not legally required to do so. Maybe not as no plans are confirmed yet?

If there's not even a planning application then there would be nothing in the searches, and demolition can hardly be "likely". The solicitor wouldn't know more than anybody else who might have read about it in the news.

(ETA: And seriously, someone bought a house next to Heathrow knowing nothing about the expansion proposals? I know about them and I don't even live in England!)

bris

Personally I think it's a no brainer, either you get the house for life or you make 25% what is the downside?

Southend1

I'm not an expert but surely the market value of a house which is about to be knocked down and concreted over is £0? So £0 plus 25% = £0. I wouldn't risk it unless the house is priced to take into account that it might well be worthless in a few years time.

phill99

Southend1 wrote: »

I'm not an expert but surely the market value of a house which is about to be knocked down and concreted over is £0? So £0 plus 25% = £0. I wouldn't risk it unless the house is priced to take into account that it might well be worthless in a few years time.

You're wrong.

The legal basis on which Heathrow would acquire the property is The Compulsory Purchase Act. Within that legislation, for the basis of market value, the 'scheme' (in this case the runway) is to be ignored and valued as though it didn't exist. Thetefore the market value would be exactly that.

Guest101

bris wrote: »

Personally I think it's a no brainer, either you get the house for life or you make 25% what is the downside?

The market price of a house will go down as plans become more concrete about 3rd runway.

So op pays 100k now
In 10 years if no runway is to be built, house could be worth 4x that easy.
But if it looks like the runway will be built there, the market price will be 40 or even 30k, the premise being that last minute profiteers may buy the land cheap ahead of any formal announcement looking to make some quick cash.

Guest101

phill99 wrote: »

You're wrong.

The legal basis on which Heathrow would acquire the property is The Compulsory Purchase Act. Within that legislation, for the basis of market value, the 'scheme' (in this case the runway) is to be ignored and valued as though it didn't exist. Thetefore the market value would be exactly that.

Absolutely, unfortunately the market fluctuations will happen before the announcement.

Kirstyb1987

would this not come up on the searches and have implications with the lender? Sorry, if I am incorrect!

Sunny2good

PasturesNew wrote: »

You need to consider a mortgage-provider's perspective. If you bought it and got into trouble, there's the chance it'd sell for a lot less than you paid. You, yourself, might get stuck in it if you couldn't live there any more/had to move for a variety of unexpected reasons.

.

Thanks for your reply. Not sure I follow this part. Are you saying that a mortgage lender would be hesitant to give me a mortgage for buying in this area?

The colleague I mentioned has just moved in. He bought a property for 500K with a 10% deposit and no problems with any bank he applied to.

Sunny2good

davidmcn wrote: »

(ETA: And seriously, someone bought a house next to Heathrow knowing nothing about the expansion proposals? I know about them and I don't even live in England!)

Yes, bit naive I know. He did find out before exchange but decided to go ahead anyway as he thought north-west runway wont go ahead. He was of the opinion that it would either be gatwick or an extension to one of the existing heathrow runways that will get approval. (Not sure I agree with that reasoning as nothing has been decided yet)
He also thought it was a no brainer as he would either live there for a long time or get 25% profit as he was getting the house at a cheap price.