Advice re selling off part of my garden

G_M

NorfolkBroad wrote: »

I realise I would have to notify my lender if I sell the land before selling the property itself/paying off the mortgage.

No. Not 'notify'. Request consent. You simply cannot do it without their agreement.

Also, I should imagine that the land registry will need to be notified.

The transaction will have to be registered with the Land Registry.

The clause people are talking about is termed 'overage'.

It's a neat way (sort of - it will still involve surveyors estimates and so on) of selling amenity land without trying to value the development potential at the point of sale.

Indeed. You agree a value for the sale based on the land being a garden.

If you do not want a property being constructed there in the future, you add a condition prohibeting this without your consent (or the consent of whoever buys your property).

Or you retain the right to receive additional money if the land is ever developed.

Davesnave

If the land is being valued, (and there is no development potential, or this is covered by an uplift clause) the valuation should be based on value added to the purchaser's house.

I sold a small area of garden a few years ago. The four purchasers had the land valued as 'garden' and their surveyor said it was worth around £12k.

I looked at the value each piece would add to the properties and concluded that a fair figure would be at least £5k each. So, I asked for £20k + legal fees.

There was a Mexican stand-off period, then they agreed with me.

Yorkie1

I seem to recall posts on this forum where an 'overage' / uplift type clause (as opposed to a restrictive covenant) applied, and the person buying the affected property was unable to get a mortgage on it because the lenders weren't happy that this clause existed.

Mallotum_X

If you do sell it as a garden, the you can have a clause put in that you get a percentage of any uplift due to building, alternatively you could sell it but keep a small ransom strip with a nominal lease in place.

We bought part of a neighbours garden. He didn't use it and we wanted to extend our garden. We offered about half of our maximum to begin with to allow some negotiation, neighbour accepted straight away - maybe we could have got it for less.

The neighbour had no mortgage so the legal side was simple, took about 3 weeks in total, with us paying all legal fees.

I would ask the neighbour to be clear about how much land they want and what they want to pay. Don't let them push you into making a suggestion on value. I would also make it clear you expect them to pay all legal fees.

Your mortgage company may want to undertake a valuation for which there will be a fee.

eddddy

Hi NorfolkBroad

Presumably, you're thinking about doing this in order to make some profit (as opposed to making a loss).

So explain to some local EAs that you are planning to sell the house next year, and you want to know the effect a smaller garden would have on selling price and saleability.

For example, if the EAs think a small garden would reduce its value by say £10k, perhaps you should be asking £15k+ for the piece of garden. (And, obviously, you would not sell it for less than £10k - as you would be making a loss.)

NorfolkBroad wrote: »

I did enquire about selling the whole plot including the bungalow to a developer a few weeks ago the plot is just under half an acre in total but even though they have built 9 houses on a smaller plot round the corner to us they said it wouldn't be viable.

So are you absolutely sure that your existing plot has no development potential (even for just 2 houses, rather than 9)?

By selling off part of the plot for your neighbour's garden, you may be killing off any chance of eventually selling the whole plot to a developer.

Richard_Webster

If you put in an uplift clause which e.g. says that buyer has to pay 33% of increase in value if he gets planning permission within 20 years then this is a contingent consideration and is chargeable to SDLT whent he purchase goes through. Buyer to pay SDLT not only on the price he pays for the land but also on the likely increase in value if permission were obtained when the purchase took place.

If after 20 years no permission is obtained then the buyer can reclaim the extra SDLT from HMRC!