Buy neighbour's house to tear it down for land

AnthonyJoseph

Hi,
I was wondering if it is viable to buy our neighbour's detached house (currently on sale) and tear it down for the land and possibly a house extension after a few years. I can't even begin to think about how the finances would work. What kind of financing options are typically available?

Bought by current property two years ago and its on a mortgage which is fixed until 2019, so not sure I can use any of the equity in my current place either.

Any pointers would be useful. Appreciate it thanks.

AJ

Doozergirl

You need to do a lot of maths and to be sure, as you're likely to devalue the both. Your house but bigger is still likely to be worth less than two smaller houses.

You're likely to be financially better buying a house with more land.

Mortgages can be adjusted and moved, but it's likely to have a penalty. Do some homework!

Davesnave

I agree with Doozer that the figures are unlikely to stack up, although if you have something unique, which you regard as a 'lifetime property,' maybe that wouldn't be of concern.

moneyistooshorttomention

But, if it is a "lifetime property" - then that's one way to make sure you get a suitable neighbour (ie have yourself as the neighbour):rotfl:.

It's a thought that has crossed my mind as to an option I might take (ie tearing down neighbouring houses and just using the land as extra garden for myself) if I ever had the money to. Though - in my case - I don't see how financially - so it's just a daydream of mine to do so.

glasgowdan

This sounds like a big waste of money. You would be far far better off looking for a bigger more suitable house on the market.

AnotherJoe

AnthonyJoseph wrote: »

Hi,
I was wondering if it is viable to buy our neighbour's detached house (currently on sale) and tear it down for the land and possibly a house extension after a few years. I can't even begin to think about how the finances would work. What kind of financing options are typically available?

Bought by current property two years ago and its on a mortgage which is fixed until 2019, so not sure I can use any of the equity in my current place either.

Any pointers would be useful. Appreciate it thanks.

AJ

If you mean financially viable, there's pretty much zero chance it would be.

As said, find a bigger house with more land. Your fixed mortgage is a trivial irrelevance compared to what you'd lose by turning a house into land and extending yiur house whilst it may well be a positive thing financially, is incredibly unlikely to compensate for that loss.

The only way it might work would be to demolish both houses and then build a Grand Designs super unique house that someone will pay well over the odds for.

Doozergirl

moneyistooshorttomention wrote: »

But, if it is a "lifetime property" - then that's one way to make sure you get a suitable neighbour (ie have yourself as the neighbour):rotfl:.

It's a thought that has crossed my mind as to an option I might take (ie tearing down neighbouring houses and just using the land as extra garden for myself) if I ever had the money to. Though - in my case - I don't see how financially - so it's just a daydream of mine to do so.

Neighbours usually have neighbours. You just end up with new ones.

davidmcn

AnthonyJoseph wrote: »

Bought by current property two years ago and its on a mortgage which is fixed until 2019, so not sure I can use any of the equity in my current place either.

You don't necessarily need to repay your existing fixed loan in order to borrow against your equity. But you're unlikely to get anything other than an expensive and limited amount of finance for buying next door, as at best its value taking into account your proposal is "plot of land with residential planning consent" (and at worst, "plot of land, with half-demolished house on it because our borrowers ran out of cash").

And you can't carry out any significant development on your existing house without your lender's consent or remortgaging (they'll need a charge over the additional plot, and may have concerns about what the new house will be worth, what it'll be worth in the middle of building works, etc).

DaftyDuck

J.K.Rowling did it, so why not.... What's she got that you haven't?

Oh. Wow. That much. That's a lot of zeros. Um...


http://www.independent.co.uk/news/people/news/rowling-to-demolish-1631m-house-to-expand-garden-2266450.html

AdrianC

AnthonyJoseph wrote: »

I can't even begin to think about how the finances would work.

You buy the house for market value.
You get planning permission to demolish it.
You spend money demolishing it.
You spend time/money landscaping it or money building your extension.

You might see your property increase in value slightly, but I doubt that's your ultimate aim, and it's unlikely to increase by more than you'll spend.

What kind of financing options are typically available?

You could extend your mortgage. You could get a personal loan. You won't get a mortgage on the other house, because your first job is to destroy their security.

You certainly won't make money off the back of it all - the far easier way to make money is to do the opposite - split a large garden up and build on part of it. If you wanted a place with a very large garden, can I ask why you bought this one so recently?

Rain_Shadow

Doozergirl wrote: »

Neighbours usually have neighbours. You just end up with new ones.

I think money was planning to flatten her entire village save for her house.:cool: