Struggling to sell house with planning permission

Widespan

Hi
We are struggling to sell our 2 bed semi which has planning permission for an adjoining 3 bed house (I.e. making our a mid terrace). We've had plenty of people interested buy no-one seems to be able to get the finance. Mortgage lenders don't take the planning permission into account when they value the house, therefore won't lend on what we are actually asking.
Everything you read says that having permission in place increases the value of a property, everyone selling a house with planning can't have this same issue.
Any ideas on how buyers can finance it or what we can do?
Thanks

davidmcn

Buyers aren't going to be able to carry out the development on a normal residential mortgage anyway - surely it's developers you want to market it to? And are you sure it's priced right?

HampshireH

Is it because adding another end to your end would devalue your property?

If I was looking to buy a semi detached property planning permission to make it a mid terrace would be of no interest at all.

Are you saying people cannot get the finance to do the build or they cannot get the finance for your 2 bed.

Did you initially get PP to do the build yourself?

babyblade41

I think a lot of people would prefer semi than mid terrace.

If you have got the planning permission then you haven't spent a great deal of money and TBH you have taken it down in value as I can't think of anyone buying a semi would then want to turn it into a terrace... or have I got this totally wrong ??

Lenders will only see what is there and not what could be there in the future or even not at all

Doozergirl

Can't you sell them off separately?

eddddy

It's probably easiest (and most profitable) to start by selling the building plot to a developer.

Then, once the new house is built (and all the disruption is over), sell your current 2 bed house - if you can wait that long.

AnotherJoe

Widespan wrote: »

Hi
We are struggling to sell our 2 bed semi which has planning permission for an adjoining 3 bed house (I.e. making our a mid terrace). We've had plenty of people interested buy no-one seems to be able to get the finance. Mortgage lenders don't take the planning permission into account when they value the house, therefore won't lend on what we are actually asking.
So, essentially, you are asking too much ?

Everything you read says that having permission in place increases the value of a property, everyone selling a house with planning can't have this same issue.
Obviously it doesn't in all cases. To take a reductio ad absurdum, if you got PP to build a sewage farm next to your house, what would it do to the price?

In your case its unknown because it would become a mid terrace, will have disruptive party wall works, and an unknown profit on building a three bed.

Any ideas on how buyers can finance it or what we can do?
Thanks

Perhaps people who can only just afford a 2 bed end terrace (to soon become a cheaper mid terrace after a lot of disruption) are not the target market to be able to afford to construct 3 bed end terrace?
As others have suggested, split the plot and sell separately or finance the build yourself or regard the PP as an inducement to buyers with a very modest increment on the price.

markin

How much have you added to the value for the planning?

Gwendo40

Planning permission does increase the value of a property... but apparently, not by as much as you currently seem to think it does.

GDB2222

Doozergirl wrote: »

Can't you sell them off separately?

Is it possible that, in some parts of the country, land prices are low enough that building a one off house is not very profitable?

Selling the plot makes the existing house hard to sell, as people will wonder what will be built plus the disruption....

Doozergirl

GDB2222 wrote: »

Is it possible that, in some parts of the country, land prices are low enough that building a one off house is not very profitable?

Selling the plot makes the existing house hard to sell, as people will wonder what will be built plus the disruption....

It's definitely possible. In some places a house can cost more to build than to buy!

The flip side of people being worried is developers not wanting a spare house. You have two markets and both will be put off by the other product.

There are potential tax implications to selling separately, I imagine.