Selling garden land

Huggons1

When I sold my previous home, I held onto a small piece of garden land, with its own vehicle access. It is around 12 meters x 12 meters. A neighbour adjoining the land has approach me to buy the land, as she has a large rear garden that she wants to build a house/bungalow on. She would need my land for the access to the new building, be able to create off street parking and would need to buy my land to get the plans through. 

Other neighbours could benefit the land to extend their gardens, build a garage, use for parking, but nothing on the scale of being able to build a house.

Does anyone have any advice, or guidance on how to value the land.

TIA

Nearlyold

Yes contact an Estate Agent who has experience in such matters. 

ReadingTim

The value of anything is merely what the buyer and seller agree it's worth.  That could be one million pounds (sterling), or one pound of tomatoes (sun ripened).  

daveyjp

One third of the total development value is your starting point if you hold the only keys to unlocking the plot.

propertyrental

The value of the land could be very dependant on the value of the proposed property.

There again, if the buyer is half-hearted in his plans and likely to walk away, the value is probably minimal (unless another neighbour wants to extend their garden.

Get advice from an RICS surveyor, and local estate agents, though agents may not be helpful unless they think they might generate you as a customer.......

RICS surveyor will charge a fee but this could well be worthwhils.

Huggons1

daveyjp said:

One third of the total development value is your starting point if you hold the only keys to unlocking the plot.

Thanks for your help. So if a house was built and sold for £300000, the land could be worth £100000, as without my land, the project couldn't happen, right?


Cheers 

daveyjp

Not quite because the developer has to spend money to be able to sell a property for £300,000.

You need the existing value and the value of the land once developed as a starting point.  Don't see it as a 'ransom' in that you can get whatever is asked because if you ask too much the land won't sell so you as the seller also gets nothing.

Gavin83

If you ask for so much that the developer won't make any money, or potentially even lose some then there's no reason for them to continue the project and therefore you'll get nothing. Therefore the trick is getting the sweet spot between you doing well but also the developer earning enough.

The other option is that you effectively give them the land in return for receiving an agreed percentage of the profits at the end. That does come with it's own risks however. 

eddddy

A valuer might look at it like this (I'm using made-up numbers)....

• Your neighbour's back garden might currently be worth £10k (because it's just a back garden)

• Your piece of land might be worth £20k (because it can used as a parking space)

• If you join both pieces of land together, they become a building plot worth £100k.

• So to use the jargon, the marriage value is £70k. (i.e. you magically add £70k in value by joining the 2 bits of land together)

So if you want to be fair, you could split the marriage value 50/50 - i.e you get £35k each.

So you might sell your land to your neighbour for £20k + £35k = £55k. (i.e. its value as a parking space + 50% of the marriage value.)


As I say, that's probably how a valuer would approach it.

ProDave

You need to find the value of a building plot in that area.  Not always easy to do.

You have the access to unlock the possibility so I would say you should ask 50% of building plot price and start negotiations at that.