Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • ric1982
    • By ric1982 8th May 18, 2:51 PM
    • 159Posts
    • 22Thanks
    ric1982
    Idea: Buying house with large land and constructing second new house on it!
    • #1
    • 8th May 18, 2:51 PM
    Idea: Buying house with large land and constructing second new house on it! 8th May 18 at 2:51 PM
    Hi,

    I was wondering how realistic is it for people who has no experience of construction (or creating extension or loft conversation) of buying a house with large back garden (for e.g.) with a view that one day you could create a second house on that land and sell it.

    I know its possible and it have been done. But it prob. cost lot of money to build house. There is also hassle and getting planning permission from council.(I don't know what is the possibility that you dont get that permission).

    So if a house is priced with view of having large land but very average amount of living space (i.e. build area). Is it good idea to go for it (with above mindset)? This is because the first thing that come to mind is that 'its good investment because its got extra land ...'

    Thanks
Page 1
    • da_rule
    • By da_rule 8th May 18, 2:58 PM
    • 2,714 Posts
    • 2,389 Thanks
    da_rule
    • #2
    • 8th May 18, 2:58 PM
    • #2
    • 8th May 18, 2:58 PM
    Can you afford the build costs for a second property in the grounds of the house?

    Can you also afford all of the associated costs? Architect, planning etc.

    Although the land may be big enough for another house to be built, is it practical? i.e can you construct a separate entry route? This isn't essential but could help with planning.

    You can always approach the local planning authority for pre-application advice. You will probably have to pay for this, but they will give you a steer on whether such an application would be granted. Obviously, if you're looking years down the line the advice would probably no longer be valid.
    • davidmcn
    • By davidmcn 8th May 18, 3:02 PM
    • 8,044 Posts
    • 8,307 Thanks
    davidmcn
    • #3
    • 8th May 18, 3:02 PM
    • #3
    • 8th May 18, 3:02 PM
    Will depend largely on the area and local policies. Many places have specific policies against new houses being created in back gardens (would both houses have decent sized gardens, adequate access etc).
    • Linton
    • By Linton 8th May 18, 3:05 PM
    • 9,405 Posts
    • 9,545 Thanks
    Linton
    • #4
    • 8th May 18, 3:05 PM
    • #4
    • 8th May 18, 3:05 PM
    The current owners would undoubtedly be aware of the possibility of building a second house on the land and would set the price accordingly.
    • angelin77
    • By angelin77 8th May 18, 3:36 PM
    • 46 Posts
    • 26 Thanks
    angelin77
    • #5
    • 8th May 18, 3:36 PM
    • #5
    • 8th May 18, 3:36 PM
    Just going through the process to build second house on plot for our son. We live in a built up area and have owned original plot for 30 years. Planning permission took 20 weeks. You have to have structural engineer's calcs, thermal calcs, water usage calcs for building regs. In our circumstances we had to pay council highways for giving cost of dropped kerb and construction. To meet thermal regs we have to put solar panels on the roof. Will also require air pressure test when built.
    It's not as straight forward as you think and is very expensive. With architect fees. council and various other fees it has cost us 20000 to date. Thank goodness we didn't have to buy the land but with the price of local housing it will be cost effective. The guy down the road demolished a detached house, only a few years old and has built two detached in its place, the vast recent property price increases have made it more viable even though many new estates are being constructer in the locality.
    • Doozergirl
    • By Doozergirl 8th May 18, 3:54 PM
    • 25,323 Posts
    • 68,998 Thanks
    Doozergirl
    • #6
    • 8th May 18, 3:54 PM
    • #6
    • 8th May 18, 3:54 PM
    The current owners would undoubtedly be aware of the possibility of building a second house on the land and would set the price accordingly.
    Originally posted by Linton
    Undoubtedly? I don't think so. It's certainly possible, it could even be probable that people have considered it, but most houses with a large amount of land won't meet the criteria for building a second house on the plot, so it isn't easy for people to know whether the potential is truly there or not.

    We have permission for a second house on our plot. It took considerable effort but didn't pay any more for the house. Even if vendors think there is potential, then there is likely to be an uplift clause in the contract should the buyer obtain permission, rather than 000s on the asking price. Even keeping half the value of the uplift in value is better than nothing.
    Everything that is supposed to be in heaven is already here on earth.
    • ReadingTim
    • By ReadingTim 8th May 18, 5:28 PM
    • 2,774 Posts
    • 3,979 Thanks
    ReadingTim
    • #7
    • 8th May 18, 5:28 PM
    • #7
    • 8th May 18, 5:28 PM
    You can get an idea of how realistic it is by the number of people doing it: other than Rachman-esque slumlords & "beds in sheds" that sort of plan doesn't feature too much on property & DIY type TV programmes - I can't speak too much about the lower end of the scale, but certainly those on Grand Designs don't appear to be complete numpties amateurs.
    • eddddy
    • By eddddy 8th May 18, 6:57 PM
    • 6,611 Posts
    • 6,477 Thanks
    eddddy
    • #8
    • 8th May 18, 6:57 PM
    • #8
    • 8th May 18, 6:57 PM
    So if a house is priced with view of having large land but very average amount of living space (i.e. build area). Is it good idea to go for it (with above mindset)? This is because the first thing that come to mind is that 'its good investment because its got extra land ...'
    Originally posted by ric1982
    In my experience, what tends to happen is that any house with a large, vaguely suitable garden is advertised as having "Development Potential (Subject to Planning Consent)" - and is advertised with a guide price.

    The EA phones around all the small-scale builders/developers on their books. If the developers feel there's a good change of getting planning consent, they often end up offering way over guide price (but less than they would for a plot with full planning consent already granted).

    So you could ask all your local EAs to add you to the list of people interested in houses with development potential.

    But you might be competing with more experienced people, with deeper pockets than you.
    • ProDave
    • By ProDave 8th May 18, 7:00 PM
    • 927 Posts
    • 1,039 Thanks
    ProDave
    • #9
    • 8th May 18, 7:00 PM
    • #9
    • 8th May 18, 7:00 PM
    Garden plots probably make up a significant proportion of self build plots. You either have to buy so cheap you are not out of pocket if you cannot get PP (or cannot build for some other technical reason) or if you are paying a premium, be sure you CAN build.

    The best example I know is someone who had a semi detached house with a 3 metre wide side garden. One day his neighbour with a similar side garden offered to sell it to him as the garden was too much to maintain, and he bought it for a song. He then got PP to shoe horn a small detached house into the 6 metre wide plot.
    • Tiglet2
    • By Tiglet2 8th May 18, 8:01 PM
    • 185 Posts
    • 183 Thanks
    Tiglet2
    If you buy the original house and land with a mortgage, you will have to get the lender to consent to "release" half of the plot (and therefore some of their security) for the new build.

    Also you will need to split the title at Land Registry so that the new build has its own title number.
    • Waterlily24
    • By Waterlily24 9th May 18, 7:01 PM
    • 980 Posts
    • 519 Thanks
    Waterlily24
    Our neighbour tried to get planning permission for a house for his son in his garden (about 4 acres) and it was never granted. Plenty of room for access too.
    • EachPenny
    • By EachPenny 9th May 18, 10:14 PM
    • 5,751 Posts
    • 15,267 Thanks
    EachPenny
    I was wondering how realistic is it for people who has no experience of construction (or creating extension or loft conversation) of buying a house with large back garden (for e.g.) with a view that one day you could create a second house on that land and sell it.

    I know its possible and it have been done. But it prob. cost lot of money to build house. There is also hassle and getting planning permission from council.(I don't know what is the possibility that you dont get that permission).
    Originally posted by ric1982
    As davidmcn points out, many councils now have policies restricting the development of gardens. You also need to bear in mind that planning rules are not set in stone and change over time. Even if the planning authority doesn't already have a policy like that in place, it doesn't mean it won't by the time you get round to doing your development.

    There is also a 'use it or lose it' restriction on planning permission, so if you apply and get consent before an adverse policy change, you then only have a limited time to implement the permission before it lapses. There is also no guarantee that a plot which once had permission would be given permission a second time round.

    This is especially important if you plan involves delaying construction until you have enough money, or until you are close to moving out (and therefore won't be concerned about the smaller garden or being overlooked). You might find the rules have changed before you are ready to develop, in which case you'll be left with a house with a big garden, and that's it.

    Addressing your first point - for someone with no prior experience, almost any construction project beyond a weekend DIY project will involve a steep learning curve. Regulations are much tighter than they used to be, so considerable expertise is required just at the planning and design stage. Supervising building work is also a technical job, and you would need to familiarise yourself with things like the CDM regulations if you want to avoid certain risks.

    By the time you've bought in all the design and planning services you need, plus paid for the builders and materials, the amount of profit you make (if any) might be marginal. One-off self-build is really something for people who intend to live in the property as a 'forever home' - that makes it worth the risk, the costs, and the time taken... because you end up with the property you've always wanted. Self-building houses for profit requires experience.

    You also need to factor in what might happen to property prices in future - there is no certainty the area of land you sell off with the new house will recover the price you paid for it now. If you don't make a profit on the land then you'll need to make more profit on the build. Which is not easy to do.
    "In the future, everyone will be rich for 15 minutes"
    • daveyjp
    • By daveyjp 9th May 18, 10:33 PM
    • 7,574 Posts
    • 6,087 Thanks
    daveyjp
    A bungalow a friend once lived in sold for 500,000 three years ago. It was four bed and on a large corner plot.

    It was demolished and there are now 2 four bed semis and a 4 bed detached on the plot.

    The semis sold for 550,000, the detached 650,000 so the development made a decent profit for the builder.
    • nubbins
    • By nubbins 9th May 18, 11:56 PM
    • 707 Posts
    • 941 Thanks
    nubbins
    Undoubtedly? I don't think so. It's certainly possible, it could even be probable that people have considered it, but most houses with a large amount of land won't meet the criteria for building a second house on the plot, so it isn't easy for people to know whether the potential is truly there or not.

    We have permission for a second house on our plot. It took considerable effort but didn't pay any more for the house. Even if vendors think there is potential, then there is likely to be an uplift clause in the contract should the buyer obtain permission, rather than 000s on the asking price. Even keeping half the value of the uplift in value is better than nothing.
    Originally posted by Doozergirl
    I agree. The corner plot detached house i'm living in I bought 3 years ago for 400K and offered 429k as I could see potential and it was a very popular plot even though the house needs a tonne of work. Planning permission recently gained for another 4 bed detached in the garden and both properties built and refurbished will be worth approx 1.4 with a refurb/build cost of approx 300k (i'm hoping). My point is that if the previous owners (who had lived in the property for 40 years)thought that PP could be achieved then the house would have sold for 200k more. What I didn't know until my PP was approved was that they had tried exactly the same in 1985 and got rejected!

    OP, getting to the stage of approval has so far cost me around 10000, I now have to get a structural engineer at approx 800, Ground investigation approx 300, Detailed drawings 3000, Landscape consultant 800, energy consultant 700 and other council fees, utilities connection etc etc etc. On top of that you have to be able to fund the build and think about other things like getting permission from my current mortgage lender and to satisfy them that the loan to value ratio on my original mortgage product still falls inside that if I split the garden and therefore the title.

    In terms of getting the PP itself, all councils will differ and there are so many reasons why they will turn you down. It is very very difficult and stressful getting PP on garden plots. It can be done but you need a lot of funds or access to funds, have good trustworthy builders and tradesmen in place, be lucky with the plot, be prepared for stress and frustration and a million other things. As other posters have said to get a plot with potential can be hard as they are usually snapped up before they hit the market but if you can get one it can be very rewarding
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,580Posts Today

8,057Users online

Martin's Twitter