Cheap land - too good to be true?

dilby00

Hi all -

I've recently been toying with the idea of buying some land and building a house on it; I've renovated 2 houses myself and at this stage it's part pipe dream, part serious. However I've just done a search on Zoopla and found a plot of land that has planning permission that seems ridiculously cheap - I'm wondering if it's normal or there's some common catches to look out for. The plots are here in South Wales which is generally cheap anyway, but still has some lovely homes. They are 0.2 acres and are due to go to auction with a guide price of £4k. Am I missing something or is this a cracking deal?

aneary

It's a guide price the actual price will probably higher.

vw100

Just saw a house that sold gone to auction, guide was 365k went for 662k.

sparky130a

I'd consider a guide price pretty much as a starting point, nothing more.

ComicGeek

Have you checked the planning permission on the local authority website? Are there any onerous planning conditions that mean it's not worth someone building it? Agricultural occupancy, social housing only, land contamination, access issues etc. I've had clients purchase sites that don't have any legal access (particularly an issue for getting drainage, water, electricity etc onto the site) that have taken years to resolve at very high costs.


Have you looked into build costs and possible resale costs, as it may well be that house sale prices are too low after build costs are taken into account.


If it's just an idea at the moment, why not go along to the auction and just observe. Then you can see what level of interest there is.

Fosterdog

It's quite normal for plots to start with a low guide price. If they really were that cheap people would be snapping them up.


Just last week I was looking at this
http://www.rightmove.co.uk/commercial-property-for-sale/property-59662285.html

If it were really only £2000 I'd snap these up.

Doozergirl

Having just looked for land in South Wales, there are quite a few plots for sale.

It appears that what you are llooing at is part of a large 'development' that has outline planning permission. There are some plots with full and recent planning permission for sale.

Looking at the local authority website for the outline permission and one of the full permissions, there is a list of conditions as long as your arm.

Previous coal mining land (and in the case of the full PP plot, landfill) the coal reports even state that the area experiences an unemployment crisis. How much are these houses worth when built? Less than the cost of building a house? Looking at what is for sale, there's nothing over £100k which is really the budget starting point for a self builder with a simple plot. The cost of bringing in utilities that aren't immediately available runs into thousands and thousands.

There's conditions on providing contamination samples, Welsh Water won't let any waste drain into the public sewer(!). The coal mining reports that any land movement should have stopped(!).

There's plenty of other stuff to look at on there. The development I looked at has the postcode CF43 3HS - I typed this in on the Rhonnda planning portal.

It doesn't instill me with confidence of having a stress free build where the house provides value for money.

greyfox

Fosterdog,

You may be in luck!

"Unsold, the last bid was £1,500. Please refer to Auctioneer for Reserve Guide Price = £2,000+"

ETA. Cross-posted with DG. Perhaps "lucky" is overstating things!

moneyistooshorttomention

ComicGeek wrote: »

Have you checked the planning permission on the local authority website? Are there any onerous planning conditions that mean it's not worth someone building it? Agricultural occupancy, social housing only, land contamination, access issues etc. I've had clients purchase sites that don't have any legal access (particularly an issue for getting drainage, water, electricity etc onto the site) that have taken years to resolve at very high costs.


Have you looked into build costs and possible resale costs, as it may well be that house sale prices are too low after build costs are taken into account.


If it's just an idea at the moment, why not go along to the auction and just observe. Then you can see what level of interest there is.

amended to - if it's in South Wales - check the land in person - to see if there's Japanese Knotweed there.

Come to think of it - check the land in person anyway.

n217970

Fosterdog wrote: »

It's quite normal for plots to start with a low guide price. If they really were that cheap people would be snapping them up.


Just last week I was looking at this
http://www.rightmove.co.uk/commercial-property-for-sale/property-59662285.html

If it were really only £2000 I'd snap these up.

Unsold, the last bid was £1,500. Please refer to Auctioneer for Reserve Guide Price = £2,000+

Interesting....

sparky130a

I'll wager it is too good to be true.

And for one good reason. There are professionals who do this, and if they're not interested there is a reason.

As DG points out there is a myriad of potential problems.

The WAC reports and soil samples Welsh water would require would on it's own make me run....