What value does planning permission add ?

wdw13

Apologies if this is a 'how long is a piece of string' question

We are looking at a property that is currently on the market for £265,000.

It has previously been sold for £220,000 in January 2007 and planning permission subsequently obtained to add a two storey extension turning it from a 3 bed semi into a 4 bed (with extended kitchen and family room). No further alterations have been made and the property has been empty since Jan 07.

Would the addition of planning permission really warrant the £45,000 increase or is this just a complete try on ? (I appreciate that there would be the planning application costs and architects fees).

Thanks

Stevie1

drawing plans, fees and submitting planning is a few thousands at most, depending on LA etc.

Has any work been carried out on the house to justify this huge increase in price in such a short time?

PasturesNew

It adds no value.

I sold a house last year with planning permissions on it. I thought it would just be likely to make it sell faster. My agent was of the same opinion. In fact, all the agents I spoke to agreed: the permission does not increase the value of the house at all, it just makes it more attractive than similar houses that don't have permission. And then only to those who thought of extending. It just takes away the question of IF planning would be granted and possibly for what.

From the OP's situation, for a £45k increase I'd want the damned thing built.

wdw13

Stevie1 wrote: »

drawing plans, fees and submitting planning is a few thousands at most, depending on LA etc.

Has any work been carried out on the house to justify this huge increase in price in such a short time?

Thanks for the quick response Steve.

No work has been done on the property at all (and to be honest it needs some money spending on it - new roof / rewiring etc) the only addition since it's previous purchase is the planning permission.

I thought that the plans might costs c £1,000 but wasn't sure.

It seems that they have just bumped the house price up to see if anyone bites !

PasturesNew

If you could make that much money for doing nothing for 2 months, then there would have been programmes on TV where people bought a house, drew up plans, got permission, sold. Banked.

There's been none.

The seller is a chancer.

But, maybe, he'd have put it on at £45k if he hadn't had the plans done. Maybe he's just a chancer anyway.

wdw13

PasturesNew wrote: »

It adds no value.

I sold a house last year with planning permissions on it. I thought it would just be likely to make it sell faster. My agent was of the same opinion. In fact, all the agents I spoke to agreed: the permission does not increase the value of the house at all, it just makes it more attractive than similar houses that don't have permission. And then only to those who thought of extending. It just takes away the question of IF planning would be granted and possibly for what.

From the OP's situation, for a £45k increase I'd want the damned thing built.

Thanks for that it will certainly make us think re offers etc.

We have had builders quote for the extension and are looking c£80,000.00 (this is for a good job on the extension and the roof / electrics) so the price hike is a good half way there !

carolinela

Sorry if im being really stupid but was the house sold in 07 or 08. have houses really gone up 45K in 1 year?
Do you know what the value of other houses in the area? maybe the 07 price was reduced dramatically for a quick sale?

chappers

I would have thought that planning permission for an extension would have very little bearing on the asking price for a property. however on an empty piece of land or for complete re-development of a plot it could add thousands.

wdw13

carolinela wrote: »

Sorry if im being really stupid but was the house sold in 07 or 08. have houses really gone up 45K in 1 year?
Do you know what the value of other houses in the area? maybe the 07 price was reduced dramatically for a quick sale?

Hi Carolinela the property was last sold in January 2007 for £220,000 and put back onto the market in September 2007 with the addition of planning permission for an extension to the main property only (no additional houses in the garden) for £265,000.

wdw13

Al_Mac wrote: »

How much have house prices increased in the last 14 months? That would be about 20k of the increase, depending on the area of the North West you are in.


Planning permission can add lots. Has for new houses in gardens. Or pensions as they are termed locally.

Cheers Al Mac

According to the BBC property prices have increased about 7% since last year. I had allowed for a small increase and the costs of the planning application so was trying to work out where the additional increase came from and if having the permission granted warranted such a jump in value (apparantly not !)

The planning permission is to extend the main house only - no additional housing

PasturesNew

7% + cost of the plans/permission would be:
(220*1.07)+1500 = £237,000