Idea: Buying house with large land and constructing second new house on it!

EachPenny

ric1982 wrote: »

I was wondering how realistic is it for people who has no experience of construction (or creating extension or loft conversation) of buying a house with large back garden (for e.g.) with a view that one day you could create a second house on that land and sell it.

I know its possible and it have been done. But it prob. cost lot of money to build house. There is also hassle and getting planning permission from council.(I don't know what is the possibility that you dont get that permission).

As davidmcn points out, many councils now have policies restricting the development of gardens. You also need to bear in mind that planning rules are not set in stone and change over time. Even if the planning authority doesn't already have a policy like that in place, it doesn't mean it won't by the time you get round to doing your development.

There is also a 'use it or lose it' restriction on planning permission, so if you apply and get consent before an adverse policy change, you then only have a limited time to implement the permission before it lapses. There is also no guarantee that a plot which once had permission would be given permission a second time round.

This is especially important if you plan involves delaying construction until you have enough money, or until you are close to moving out (and therefore won't be concerned about the smaller garden or being overlooked). You might find the rules have changed before you are ready to develop, in which case you'll be left with a house with a big garden, and that's it.

Addressing your first point - for someone with no prior experience, almost any construction project beyond a weekend DIY project will involve a steep learning curve. Regulations are much tighter than they used to be, so considerable expertise is required just at the planning and design stage. Supervising building work is also a technical job, and you would need to familiarise yourself with things like the CDM regulations if you want to avoid certain risks.

By the time you've bought in all the design and planning services you need, plus paid for the builders and materials, the amount of profit you make (if any) might be marginal. One-off self-build is really something for people who intend to live in the property as a 'forever home' - that makes it worth the risk, the costs, and the time taken... because you end up with the property you've always wanted. Self-building houses for profit requires experience.

You also need to factor in what might happen to property prices in future - there is no certainty the area of land you sell off with the new house will recover the price you paid for it now. If you don't make a profit on the land then you'll need to make more profit on the build. Which is not easy to do.

daveyjp

A bungalow a friend once lived in sold for £500,000 three years ago. It was four bed and on a large corner plot.

It was demolished and there are now 2 four bed semis and a 4 bed detached on the plot.

The semis sold for £550,000, the detached £650,000 so the development made a decent profit for the builder.

nubbins

Doozergirl wrote: »

Undoubtedly? I don't think so. It's certainly possible, it could even be probable that people have considered it, but most houses with a large amount of land won't meet the criteria for building a second house on the plot, so it isn't easy for people to know whether the potential is truly there or not.

We have permission for a second house on our plot. It took considerable effort but didn't pay any more for the house. Even if vendors think there is potential, then there is likely to be an uplift clause in the contract should the buyer obtain permission, rather than £000s on the asking price. Even keeping half the value of the uplift in value is better than nothing.

I agree. The corner plot detached house i'm living in I bought 3 years ago for 400K and offered 429k as I could see potential and it was a very popular plot even though the house needs a tonne of work. Planning permission recently gained for another 4 bed detached in the garden and both properties built and refurbished will be worth approx 1.4 with a refurb/build cost of approx 300k (i'm hoping). My point is that if the previous owners (who had lived in the property for 40 years)thought that PP could be achieved then the house would have sold for 200k more. What I didn't know until my PP was approved was that they had tried exactly the same in 1985 and got rejected!

OP, getting to the stage of approval has so far cost me around £10000, I now have to get a structural engineer at approx £800, Ground investigation approx £300, Detailed drawings £3000, Landscape consultant £800, energy consultant £700 and other council fees, utilities connection etc etc etc. On top of that you have to be able to fund the build and think about other things like getting permission from my current mortgage lender and to satisfy them that the loan to value ratio on my original mortgage product still falls inside that if I split the garden and therefore the title.

In terms of getting the PP itself, all councils will differ and there are so many reasons why they will turn you down. It is very very difficult and stressful getting PP on garden plots. It can be done but you need a lot of funds or access to funds, have good trustworthy builders and tradesmen in place, be lucky with the plot, be prepared for stress and frustration and a million other things. As other posters have said to get a plot with potential can be hard as they are usually snapped up before they hit the market but if you can get one it can be very rewarding