Selling your garden for housing pro's and con's.

Boohoo

Hello.


I need some advice about my dad's options for selling his most of his garden to a developer.
At the moment there are 6 semis 4 year old houses to the left of his house that were built in 5 peoples back gardens.
The 2 houses on his left are owned by a HA and the same for the 2 homes on his right.
Yesterday he was told by next door neighbour that the HA have told him a planning application we be going in to built 2 new houses to the left of him. He spoke to the people on the right and they have been told the HA also want to built homes in the rear gardens.
The gardens are about 500sqm and he having a meeting today thinking about selling his garden as he is in his late 70's and it's getting too much for him to care for the garden.
There is no problem with access road as the 4 year old houses have a proper access road from the main road and the newer homes will just use that road.
He lives in Luton and a person who lives in same street has sold his garden for £45,000 to the same developer early this year.
He wants to know if that is a good offer for the area and if he sells what should he be worried about in selling his garden like CGT, getting paid and so on.
He has seen the plans and the homes look the same as his house and the same for the street so they will not look out of place.


Thanks for any advice you may have.

Keep_pedalling

There will be no GGT to pay. As for the value of the land he should get a professional valuation from a RICS surveyor. There will be a cost to this, but it's the only way to make sure he is being offered a fair value.

Chanes

Might be an idea to speak to a local estate agent and a surveyor to check values if they make an offer?

I would be very wary about selling land which formed part of a single dwelling, though I suppose if you considered some covenants to have placed on it to protect anything concerning you regarding use and access after the sale it could work. Whatever you do, good luck and I hope you make a bundle!

Davesnave

If the area close by is moving from low density to higher density as a result of garden plot building, then it might be a good option to go with the flow, epecially if it is not a high value property and he wants to stay there independently as long as possible.

Decent representation in negotiation and/or an independent valuation would be wise, but it sounds as if a precedent has been set. The purchaser should pay all the legal costs involved in the actual sale, if he goes ahead, so he should choose an experienced solicitor too.

moneyistooshorttomention

Downsides:

- any money for selling his garden wouldnt all be net gain. Reason being his house would lose value in the process (ie from smaller garden and greater degree of overlooking)

- how much he values other peoples opinions of him

- having to put up with the disruption (dirt/noise/lack of privacy) of having building going on in his garden.

If the garden is feeling too big for him personally - then he could always join a Garden Share scheme (ie whereby he makes an official agreement with other people that havent got a garden and they use the garden to grow their vegetables/fruit and he gets a share of the produce). That way - he gets some fresh organic food for himself (and saves on food bills as a result) and gets a bit of company too. Those two things could well be worth it to him v. what use would he have in mind for a lump sum of money at his age if he gets it?

Me - if my garden felt too big to me - I wouldnt hesitate to get the food/company advantage of garden-sharing and know that my property remained my own. Once I'm in my 70s I would hope I would be financially straight by then anyway and would be wondering what to do with any extra anyway....

phil24_7

On the other hand. Perhaps devaluing the property by selling of the garden now could work to his/your advantage. It may well push assets under the tax threshold for inheritance and give him some ready cash to spend on fun things or to gift to his children early (10k each can be gifted tax free). Only you know the ins and outs of this.

kingfisherblue

I've no idea if this is feasible, but your dad might want to consider whether as part of a deal, a bungalow might be built for him. It could be easier as he gets older.

I don't know the ins and outs, but someone I know sold part of their garden and a new bungalow was part of the deal.

Boohoo

Downsides:

- any money for selling his garden wouldnt all be net gain. Reason being his house would lose value in the process (ie from smaller garden and greater degree of overlooking)

- how much he values other peoples opinions of him

- having to put up with the disruption (dirt/noise/lack of privacy) of having building going on in his garden.

That seems to be not the case for the area. 1 house that sold its garden went up for sale 4 months and that went for £10,000 more than a house with a 500sqm garden that sold 6/7 months ago so he would not suffer loss in value.

what use would he have in mind for a lump sum of money at his age if he gets it?

If he gets any money he is going to fit new windows/doors as they are over 30 years old and the sealed units are blown and some of the hinges need replacing so instead of repairing hinges/units new D/glazing. He may replace the boiler/rads and maybe a new modern kitchen as his has seen better days.
He is not desperate for the money but he thinks the garden is just sitting there and if he can make some money out of it without being ripped off and be happy with the outcome then why not.
My dad has no intention of moving at his age and we have suggested a bungalow but he said when he moves next it will be into a plot at the crem.

Keep_pedalling

phil24_7 wrote: »

On the other hand. Perhaps devaluing the property by selling of the garden now could work to his/your advantage. It may well push assets under the tax threshold for inheritance and give him some ready cash to spend on fun things or to gift to his children early (10k each can be gifted tax free). Only you know the ins and outs of this.

I don't know where you get that £10k figure from, there is no gift tax in the UK so regardless of the size of any gift it is always tax free to the recipient, although gifts over your £3000 PA allowence will still form part of your estate for 7 years.

Boohoo

My dad had a meeting with one of the developer reps last night. I tried to get there but due to working late and traffic i missed it.
The guy did draw a rough sketch of what they would like to buy and its about 2/3rds of his garden which is the same as the rest that have sold in the street.
The rep didn't mention any prices and just showed my dad the plans of the houses that maybe built on his land which are the same design as the rest already built.
As for gifting his siblings £10,000 tax free or whatever it was/is it's his money and he can spend it on what he wants and we have told him not to give us any money if the garden sale goes ahead.
Thanks for the replies.

phil24_7

Keep_pedalling wrote: »

I don't know where you get that £10k figure from, there is no gift tax in the UK so regardless of the size of any gift it is always tax free to the recipient, although gifts over your £3000 PA allowence will still form part of your estate for 7 years.

I was always led to believe that there was a £10k limit on cash gifts before tax was applicable but a little research shows this is not the case. I don't know if my information is old or just an old wives tale but thanks for the heads up anyway.

Regards
Phil