Asking for a price reduction due to a large new build proposed development!

Clara72

Hi all,
I'm really in a quandary what to do. We are FTBs and offered on a house about 6 weeks ago, we were the only ones to see it and we offered bang in the middle of the guide price range with the hope they'd just accept and we could secure it and avoid any bidding war. It worked and we happy with our offer! However, it wasn't until a couple of weeks ago that on getting info from them about the property they declared a new build development was proposed for 100 new houses in the beautiful field the garden overlooks - one of the reasons we liked the house so much! After the initial shock we decided we still wanted to go ahead, and we got the survey done thinking we'd try and re-negotiate after that. The planning application is now live and I feel sure it will go ahead due to fact that the new Local Plan for our council got thrown out which apparently makes it harder to refuse unsuitable developments. We didn't know about this when we offered and I thought the fact the field wasn't an allocated site in the new plan would mean it wouldn't be developed for a good decade at least...I was wrong. However we've now both lost our nerve about re-negotiating as houses just seem to have gone up so much here and we don't want to risk the seller pulling out and trying to get a higher offer (which we were initially worried about), but equally I am also really worried about not being able to sell in future (we were only planning to stay in the house 3-5 years), paying too much, being taken in etc...I do want to ask for a discount of about 2% to feel a bit better about it all, which would make it at the bottom of their original asking price range, but am not sure if this is reasonable to do now and worry about how the sellers will react. Also don't want major delays. Any advice appreciated!

AdrianC

Some simple questions...

If you pull out of this, can you find a similar place for similar money with a guarantee of no development nearby?
You've pretty much answered this in your post.

If you pull out, will the vendor find another buyer at that price?
You've pretty much answered this, too, in your post.

So given that you were apparently worried about being out-bid, and you do think that prices are now higher and the vendor will get that, why are you worried about short-to-medium term resale?

You say you've lost your nerve over renegotiating, yet you want to renegotiate...

Would I say it was a reasonable request? No, not really. Especially for as little as 2%. That's not a meaningful amount, it's a feel-good hug.

If you want to control what happens with your view, you need to own that land. It shouldn't be any surprise to anybody that there are developments popping up all over, and I'm sure that you could have found the planning app for this one yourselves prior to offering.

But what if the plans had been made public the day after you'd exchanged contracts? Or two months after completion?

Perhaps the new builds will even increase the value of your place, once the years of disruption and noise and dust and construction traffic are out of the way?

bramptonbrew

What amount does the 2% come out as roughly? 2% of 200,000 is smaller than 2% of 2 million! If you let us know the price range you're dealing with it might help people give better advice.

TheJP

Clara72 said:

Hi all,
I'm really in a quandary what to do. We are FTBs and offered on a house about 6 weeks ago, we were the only ones to see it and we offered bang in the middle of the guide price range with the hope they'd just accept and we could secure it and avoid any bidding war. It worked and we happy with our offer! However, it wasn't until a couple of weeks ago that on getting info from them about the property they declared a new build development was proposed for 100 new houses in the beautiful field the garden overlooks - one of the reasons we liked the house so much! After the initial shock we decided we still wanted to go ahead, and we got the survey done thinking we'd try and re-negotiate after that. The planning application is now live and I feel sure it will go ahead due to fact that the new Local Plan for our council got thrown out which apparently makes it harder to refuse unsuitable developments. We didn't know about this when we offered and I thought the fact the field wasn't an allocated site in the new plan would mean it wouldn't be developed for a good decade at least...I was wrong. However we've now both lost our nerve about re-negotiating as houses just seem to have gone up so much here and we don't want to risk the seller pulling out and trying to get a higher offer (which we were initially worried about), but equally I am also really worried about not being able to sell in future (we were only planning to stay in the house 3-5 years), paying too much, being taken in etc...I do want to ask for a discount of about 2% to feel a bit better about it all, which would make it at the bottom of their original asking price range, but am not sure if this is reasonable to do now and worry about how the sellers will react. Also don't want major delays. Any advice appreciated!

You could ask for a reduction, they will either say yes or no or ask to remarket the property if there was a lot of interest.

You will not struggle to resell a house because other houses surround that otherwise no one would buy houses! 

Have you had a survey yet? Perhaps wait and pick your battles, if you get a menial reduction for this you may find yourself locked out of any serious renegotiation that will impact your budget. 

Section62

Clara72 said:

The planning application is now live and I feel sure it will go ahead due to fact that the new Local Plan for our council got thrown out which apparently makes it harder to refuse unsuitable developments.

This isn't really accurate.  An emerging new plan can be disregarded by a planning inspector when looking at an individual development, if it hasn't been adopted due to concerns over the content of the plan. (e.g. 'thrown out')

However, if the emerging local plan isn't adopted then the fall-back is to the current adopted plan, in combination with changes in national and regional policy since the date of adoption (as applies in all cases anyway).

Emerging local plans will reflect national and regional policy (otherwise they get 'thrown out'), as well as reflecting the policies in the previously adopted plan.  The new plans (as interpreted with updated guidance) are rarely that significantly different to the old ones, barring the specifics of the wording and application.

If this site hasn't been identified in the emerging plan as suitable for housing then it is unlikely to be identified as such in the current (old) one.  So no change is likely there.

Given the demand for land for new housing, practically any site (barring SSSI's and historic monuments) could be fair game for the developers, regardless of what a local plan says. The need for housing is currently outweighing practically every other consideration.

And that is one of the reasons why many local plans aren't getting approved - because the inspectors feel that inadequate provision for new housing is being made.

If the rationale is that a price reduction is due because the local plan has been thrown out, it is not a good one.  If this development is going to happen it will happen. If there is no exceptional reason not to build houses on the land, the developer will get to build them.

Clara72

Thanks all for all the useful opinions. Maybe I am just being a nervous FTB but I am just quite worried when we do come to sell the development will be in full swing no-one will want to buy with that going on and we could find ourselves selling at a loss/be in negative equity. If we were planning to stay longer I would be less concerned. I also feel a bit upset we weren't made aware until q a few weeks down the line when we had potentially missed out on other possibilities, but we prob should have asked the question. Lesson learnt, you can not rely on info in Local Plans!

comeandgo

I would agree a large new build development could hinder your future plans if you are only planning to stay a few years, especially if your house is the same size as those being built and all the incentives offered on new housing. When we bought our house we knew the field next to it was earmarked for more houses but it took 15 years for the building to start.

Clara72

Section62 said:

Clara72 said:

The planning application is now live and I feel sure it will go ahead due to fact that the new Local Plan for our council got thrown out which apparently makes it harder to refuse unsuitable developments.

This isn't really accurate.  An emerging new plan can be disregarded by a planning inspector when looking at an individual development, if it hasn't been adopted due to concerns over the content of the plan. (e.g. 'thrown out')

However, if the emerging local plan isn't adopted then the fall-back is to the current adopted plan, in combination with changes in national and regional policy since the date of adoption (as applies in all cases anyway).

Emerging local plans will reflect national and regional policy (otherwise they get 'thrown out'), as well as reflecting the policies in the previously adopted plan.  The new plans (as interpreted with updated guidance) are rarely that significantly different to the old ones, barring the specifics of the wording and application.

If this site hasn't been identified in the emerging plan as suitable for housing then it is unlikely to be identified as such in the current (old) one.  So no change is likely there.

Given the demand for land for new housing, practically any site (barring SSSI's and historic monuments) could be fair game for the developers, regardless of what a local plan says. The need for housing is currently outweighing practically every other consideration.

And that is one of the reasons why many local plans aren't getting approved - because the inspectors feel that inadequate provision for new housing is being made.

If the rationale is that a price reduction is due because the local plan has been thrown out, it is not a good one.  If this development is going to happen it will happen. If there is no exceptional reason not to build houses on the land, the developer will get to build them.

The Inspector advised the council to withdraw the new one they had spent 5 years preparing as it wouldn't be found sound (due to it not securing funding for a large new garden village that formed a large part of the housing supply in the plan), and from the information I've read that they've posted about it the old Plan from 2011 is considered out of date and will not hold much weight............

AdrianC

Clara72 said:

I also feel a bit upset we weren't made aware until q a few weeks down the line when we had potentially missed out on other possibilities, but we prob should have asked the question.

Or done your own research.

When does google find this development was first made public?

Lesson learnt, you can not rely on info in Local Plans!

You mean the parish or town's NDP?
It is not the be-all and end-all.
It is a direction in which the community want their views to be considered, assuming it has been adopted at referendum. If it hasn't, then it's just a draft.

Even if it has, it is not legally binding - it's one thing the council have to take into account in deciding whether to accept or refuse the application. Another thing is the central government housing allocations... Even an adopted NDP loses weight after a few years if the council has less than five years supply of new houses.

In addition, anything vaguely controversial will not be decided by a planning officer, it'll be referred to the councillors for the decision.

gemma.zhang

Just to say we were in the exact situation a month ago. Didn’t feel right with the offer price but still like the property enough to proceed, the fear of missing out !

Me and my husband had different opinion didn't help either. So we asked for 15k drop of price with a long email explaining the situation. Kind of a gamble as we were close to walk away. Vendor thought hard over the long weekend and agreed on 10k to meet us in the middle. He was in need of money for investment and wanted a quick sale. So we continue with the purchase.

not easy decision, just go with what makes you feel right.

good luck ! 

onylon

It sounds like huge risk, especially if this isn't a long term investment for you.

You could have years of noise, dust and disruption and then struggle to sell because you are competing with the new builds. If building work is ongoing when you want to sell or if it's just about to start then your house price will tank. No one wants to live next door to a building site.