Sell with planning permission or without?

Jet

I inherited a rental property around 5 years ago with a protected tenant. A fairly unique situation in that I am the third generation of my family to be the tenants landlord. Sadly, the tenant has now passed away and I find myself with vacant possession of a property 30 miles away from me that is on a large plot in an affluent area. 

The area is technically green belt but lots of new properties have been built around it, I suspect because of redundant farm buildings. 

The house could be extended significantly and the plot is big enough to build other properties on. The house is in poor condition having been rented to the same tenant for 61 years and with restrictions on rent rises and different rules on repairs to a normal AST. 

I’m trying to weigh up my options. 

Sell as it is, but with a covenant on it for any future building work.

Get planning permission for an extension at least and possibly another house and then sell.

Project manage things myself (least likely given my personal circumstances).

I’d appreciate any advice, ideas or input.

thanks. 

Albermarle

Get planning permission for an extension at least and possibly another house and then sell.

Although every situation is different, I would have thought getting planning permission for an extension should not be that difficult. On the other side getting planning permission for another house will be more complicated, and probably time consuming. You will need full architects drawings I assume and then changes might be suggested, or even a refusal.

I think it would be a good idea to canvass the views of local estate agents,
1) on value if sold as is
2) House renovated with extension
1)&2) + PP for another house ( and their opinion on the likelihood of getting PP) 

Jet

Thanks for your reply . Any idea how long it would take to get plans drawn up and obtain planning permission? 

SiliconChip

How big a plot is it? If it's large enough I'd be tempted to find a small developer working in that area who is likely to know if PP would be granted in the circumstances you describe and sell it to them as a development site so that you get payment up front and they do all the paperwork and complete the building (and take their own profit at the end).

user1977

Jet said:

Any idea how long it would take to get plans drawn up and obtain planning permission? 

Have a look at similar applications on the council's website. You probably want to do that anyway to see what sort of criteria you'll need to think about.

eddddy

Jet said:

Get planning permission for an extension at least and possibly another house and then sell.

I guess the problem might be that, unless you are experienced in this stuff, you might seriously underestimate (or overestimate) the development potential.

For example, you might only see potential for an extension and a new house...
... but an experienced developer might see potential for demolishing the current house and building a block of 8 flats.

So it might be worth talking to a few estate agents who specialise in selling development land, to get their thoughts. And maybe even think about hiring a planning consultant.

(Or on the other hand, it could be that there's no real possibility that you would get consent for an additional house.)



FWIW, a builder I know bought  a run down house and got planning consent to demolish it and build a 5 bed detached house - because the council planners told him that is the most he would get.

But he was later fuming, because next-door-but-one later got consent for a block of 9 flats on a similar sized plot. The council rejected the application, but the developer won on appeal.

Section62

Jet said:

...

The house could be extended significantly and the plot is big enough to build other properties on. The house is in poor condition having been rented to the same tenant for 61 years and with restrictions on rent rises and different rules on repairs to a normal AST. 

I’m trying to weigh up my options. 

Sell as it is, but with a covenant on it for any future building work.

Get planning permission for an extension at least and possibly another house and then sell.

Project manage things myself (least likely given my personal circumstances).
...

If the existing property is in poor condition then it may be more economic to demolish and rebuild, rather than doing a renovation.  And a developer is likely to want to pack as may boxes onto the plot as they can get away with, which usually means starting with a clear site.

Obtaining planning consent isn't that cheap these days - and the fee will probably be one calculated based on the total number of dwellings to be built.  If you pay for an outline design and get the planning consent you need to guess right on the number and size of units the developer would find most economic to build... otherwise the developer has to make their own application for their alternative scheme so won't gain much from your investment, other than knowing develipment would be possible in principle.  But an experienced local developer will probably know what they can and can't do with the land, and can get some level of assurance from the planning authority by getting pre-application advice.  So your approved application may have little extra value to them, over and above the value of the land itself.

If you have no prior experience of multiple-dwelling development then DIYing this project yourself is unlikely to give you the best outcome.  Plus you'd need to be able to access a six or seven-figure sum of money to fund the work with no return until the first dwelling is sold.  If you need to borrow then it would be on commercial terms, not a standard mortgage (unless you remortgage your own home and avoid being totally transparent with the bank about why).

TBH the best outcome may be selling through an agent with expertise in larger dwellings and/or development land.  They will be best placed to guide you on selling as is, selling as a single development plot, or subdividing and offering as individual plots.

You'll need professional advice on uplift clauses if you go down that route.  Developers are very good at finding ways round them - for example insisting on a reasonable time limit and then running the clock down.

SarahB16

I agree with Section62

I think there could be a significant level of interest in what you have inherited.  I agree, you need to use an agent (e.g. Cushman & Wakefield) so the land is adequately advertised/promoted.  I think it will likely be sold as one large plot to one developer and I envisage them demolishing the home that is there and then building whatever is most likely to generate them the highest gross development value/sales value.  This could be either houses or apartments. 

You will need to use a well-respected firm of solicitors (e.g. Browne Jacobson, Mills & Reeves, etc that has a specialist property law department) so that they can write the overage agreement, e.g. you may wish to sell the land for its current market value of x but also wish to receive 3% of the gross sales proceeds of what the developer has built on your land.  Cushman & Wakefield I presume will likely also be able to advise you as to what is a fair and reasonable overage amount and the firm of solicitors to ensure there are no loopholes to stop the developer from paying you the overage as that payment will be many years away when the newly built homes are sold. 

theartfullodger

We did, PIL House.  Didn't appear to make any difference.

Herzlos

Just sell it as is, because the odds of putting in permission for an extention that the buyer wants is low. 

There may be some merit in selling with permission for another dwelling, but there's no guarantee it'll help that much. 

There's nothing stopping you listing it for sale now and applying for planning permission if you don't get much interest, but I wouldn't delay the listing part. 

lincroft1710

Just sell as is via a savvy agent who will market it "of interest to developers" "potential to demolish and redevelop site with x no.of dwellings (subject to planning permission)"