ransom strip

max_vaughan

Dear All
I am making this enquiry to you to try to better understand my current position and how to take an opportunity presented to me forward to the best of my advantage.

I have been approached by a development company that wish to purchase parts of the gardens of a number of houses behind my property and to then build a small housing estate.

They have approached me as I own what I now after research understand to be known as a 'ransom strip'. ie I have a relatively small amount of land which they need so to create an access route to this proposed new housing estate. I understand that a planning application at this stage has not yet been submitted.

I have no idea how much my piece of land is worth. I understand that they are proposing to build 8 new houses which as I know the area I reckon would be worth in the region of £300 -350k each.

I have read about the Stokes and Cambridge Corp 1961 which as a guide suggests the ransom strip is worth 1/3 of the increase in the value of the land. Does this suggest a 1/3 of the value of the complete estate ie £2.4- £2.8m minus the cost of the purchase of the land originally ? I also understand that ultimately the value is however much a party is willing to pay .

DO I need professional assistance with an valuation - and negotiations ?

Any advice / experiences gratefully received

Thanks

worldtraveller

max_vaughan wrote: »

DO I need professional assistance with an valuation - and negotiations ?

...... IMHO, yes.

martinthebandit

worldtraveller wrote: »

......Yes.

Is the right answer, the developers are far more used to negotiating, and probably far better at it, than you are.

[Deleted User]

I would see how much they offer first then if not happy seek legal advice.

Owain_Moneysaver

No, it's the increase in the value of the land due to the access being given, not the increase due to building on the land. Your £2.8m includes the construction cost of the houses and the developer's profit, which would be ignored.

In some cases the 'ransom' value will be 1/3rd of the uplift in the value of the land; in other cases it may be a lot more -- or a lot less. Also note that was a local authority using compulsory purchase powers; a private buyer has much more leeway how they spend their funds as they are not spending public money. Cases here where the value was 50% of the uplift.

A chartered surveyor would be able to give you an estimate.

If you and your neighbours are all willing to sell, in principle, then it may be better for you to club together and appoint a solicitor to act for you jointly, so the developer cannot play one neighbour against another.

EachPenny

martinthebandit wrote: »

Is the right answer, the developers are far more used to negotiating, and probably far better at it, than you are.

Which is also the right answer.

OP, you'd get more (better?) advice posting on the "House Buying, Renting & Selling" board, but the key bit of advice is you need a professional to help you.

Before counting the pounds you need to sure you have a firm case that this land is indeed a ransom strip which you can profit from.

It is not unknown for developers to work with local planning authorities to find ways of avoiding the need to use "ransom strip" land (e.g. waivers from normal requirements such as a visibility splay), and in some cases local authorities have actively got involved and used compulsory purchase powers to obtain land for the developer to use.

You also need to be aware that some people will see you a "wealthy landowner" using your "power" to prevent much needed homes being built (or making them more expensive), thus making other people "homeless". This is nonsense of course, but you may need professional help to ensure you are not cast in this light if things get unpleasant later on.

Cornucopia

This thread has been moved to a different forum in expectation of an improved response.

eddddy

max_vaughan wrote: »

I have been approached by a development company that wish to purchase parts of the gardens of a number of houses behind my property and to then build a small housing estate.

They have approached me as I own what I now after research understand to be known as a 'ransom strip'...

The 'ransom strip' aspect sounds like it might be a bit of a red herring.

If the developer needs to buy land from a number of people to make the development viable...

...I guess every property owner could argue that they could hold the developer to ransom if they refuse to sell - just like you could.

So if everyone tries to hold the developer to ransom (i.e. try to get a better deal for themselves than everyone else), it's never going to work.


Perhaps the best solution is that all property owners club together and hire a land valuation surveyor - who works out what the total development plot would be worth, and a fair split for each of the property owners.

Thrugelmir

How much would it devalue your property. Having the traffic from 8 houses passing close by.

AnotherJoe

There's also a top value they will pay irrespective the profit they woudl make.

That would be determined not just by how much they coudl buy off you, but by other more radical solutions, for example say you were holding out for £300k but they could buy an existing house for £250k to demolish and create an access road, which would also devalue your house by £50k, maybe you'd be better off selling at £200k.

that

The housing estate near me has had at least 4 different planning changes and usage over the last few years. Once is was going to be a school, then houses, now flats.

What is the chance they are going to build flats there that will overlook you, and will they block out your sunlight?

Could be an excellent opportunity to sell your house too?

However you story did make me think of this http://www.earthporm.com/refused-million-dollar-offer/