With a shortage of housing, land is an increasingly valuable commodity. We are seeing a rise in people with large gardens or pieces of land looking to develop another property on the site. Either building an additional property themselves as a business venture; or selling to a third party who will effectively build one or more properties in the garden. We look at some things to consider if you are thinking of selling part of your garden.
How it works
The process is not always straightforward, but the result can be very profitable.
You will need to decide how much of your garden should be sold and how the land should be valued. Further, an architect or surveyor will need to draw up plans.
If you are selling the land to a third party, you will need to discuss specific arrangements with your buyer. Often, land will be of a higher value if you have obtained planning permission for the building of a new property. Alternatively, the buyer may obtain the planning permission themselves.
Depending on what you agree with the buyer, a solicitor will need to draw up an appropriate contract. You will need to agree terms on deposit arrangements; whether the agreement is conditional on obtaining planning permission; and whether the purchaser will require any access rights or rights for pipes and wires to run under your own land. A separate document will be required to split the land into two with various rights being created for both parties.
You may come across several obstacles which you will need to overcome before completing the sale. Here are just a few:
If you have a mortgage over your property, you will need the mortgagee’s consent to release part of the land from your ownership. Whether the lender will consent is likely to depend on the amount left on your mortgage and the value of the land. The lender may refer this to an independent valuer and they must make sure that releasing the land will not jeopardise their interest in the land.
Your solicitor will be able to advise you whether there are any restrictions in the title to your property which will prevent or limit you from building any additional buildings. These restrictions may have been put into place at the time your property or the estate was constructed. You may need consent from the original land developer in order to build an additional property.
Whether you or your purchaser applies for the planning permission, the local authority will consider any objections from neighbours etc.
If your property is in a conservation area the council may need to provide further consent before you can build.
Drainage and water considerations
Before building, you will need consent from the water authority if the new property is to be built over an existing drain or sewer. It is advisable to avoid building where there is a known drain or sewer in the garden.
Depending on the location of the land you are selling, you may need consider whether rights of way are required. This could be a right of access over your own land for the people buying the new plot; or a right of way for you to go over the new plot.
If you are thinking of selling part of your garden, discuss with your solicitor before doing so. It is not always a straightforward process, and serious consideration needs to be given to practical matters such as rights of access and planning permission.