Buying land to build a residential property?

tallac

My dad has had a hair brained idea. He has seen a small car park at the end of a residential street. He's asked me whether it's possible for him to contact the land owner of the car park to see if they want to sell. If they do, then he is interested in building two houses on the land (one for himself and another for another family member). Obviously, him telling me this sets off multiple alarm bells off in my head. I can see many obstacles that would be a 100% blocker straight off the bat. For example (not exhaustive):

1. Land owner doesn't want to sell.
2. Even if he owned the land, he cannot get planning permission to build the properties.
3. The cost of everything is far higher than he is willing to spend.

However, what's the cheapest and easiest way for him to see if it even remotely seems feasible? Does he need to speak to a Land Acquisition Solicitor? Would they be able to work out items 1 and 2 from the list above?

Owain_Moneysaver

4. The landowner is very likely to put in an overage clause in the sale contract so that if there is an increase in the land value when planning permission is gained, he gets a percentage of the increase (usually a third).
5. Capital Gains Tax may be payable on anything that's not your dad's sole/main dwelling. 
However, if your dad can get the land for a reasonable price, and get planning permission, and either sell the plots with permission (and preferably utilities, as serviced plots) or run a building project, there may be a good profit to be made. Small property developers do this all the time. 

tacpot12

It's not so hair-brained if your dad has experience as a property developer or the skills to manage a project of this scale and risk. It would be a good idea to check the cost of life insurance on him if he is going to be the project manager. If anything happens to him, the life policy will pay for a professional to come in to complete the project.

Davesnave

The first question is exactly what function does this car park perform?

Obviously it's a place to park cars, but was it designed into the street when the properties were built, could it be owned by the council, or is it ancillary to a business? If it were to be lost as a parking facility, where would the vehicles go that park there now? Would alternative parking be easy or hard to find? etc

The answers to these questions, and others, would determine the likelihood of the Planning Dept and Highways agreeing to the change of use required for residential use.

tallac

tacpot12 said:

It's not so hair-brained if your dad has experience as a property developer or the skills to manage a project of this scale and risk. It would be a good idea to check the cost of life insurance on him if he is going to be the project manager. If anything happens to him, the life policy will pay for a professional to come in to complete the project.

Of course, not so hair brained for someone with experience but he's got zero experience of property development or of project management. He's just over 70 as well so he's not exactly in his prime.

Davesnave

tallac said:

tacpot12 said:

It's not so hair-brained if your dad has experience as a property developer or the skills to manage a project of this scale and risk. It would be a good idea to check the cost of life insurance on him if he is going to be the project manager. If anything happens to him, the life policy will pay for a professional to come in to complete the project.

Of course, not so hair brained for someone with experience but he's got zero experience of property development or of project management. He's just over 70 as well so he's not exactly in his prime.

I'm over 70 too, but unlike both of you, I know the normal way of spelling 'harebrained' is as I've just done it, so being 70+ doesn't exactly make you brain-addled!

However, I agree with Owain that the site could be simply sold off for profit, or if your father has the capital, a development would be possible if he hired a project manager to oversee/coordinate the work. I embarked on a major rebuild when I was 65, and despite some experience,  without a project-managing associate I would have been out of my depth very quickly.