Should I Buy or Sell The Land?

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The accidental property developer

Today most people are aware of the potential property has, no doubt due to the many television programmes on property, books and magazines, radio and of course it being a common topic of conversation for many. Indeed many treat their property more like an investment than a home and it may be when the house needs extending that you first think about the possibility of buying land from your neighbour. Most people are relatively precious about their gardens and will only consider giving up part of it for a disproportionate amount of money far above what the land value would be on the open market. In this case it can be appreciated as the land has a special value to them.

Garden grabbing

Having said that, some more densely populated areas what has become more affectionately known as garden grabbing has taken place. This is where the long back gardens that were once popular have sections sold off to allow developments within them and there are many developers that put together such developments and have to negotiate with several neighbours about their garden and therefore achieve the best return on their development.

There are two questions; should you sell all the land, in the case of garden grabbing, and should you buy the land, if you intend to extend, and if so how much is the land worth?

Buying land from a neighbour

Always a very tricky negotiation as at the end of the day you will still be neighbours, whether you purchase the land or not. As usual, we recommend a cup of tea meeting with the neighbour and a general discussion. You will soon get signals and signs from this as whether it is worth pursuing.

But what value is the neighbour's land?

Very difficult to answer. We are dealing with the case where a strip of land approximately 1 metre wide x 5 metres in length is required to allow the addition of a garage to the property. The land is not actually used by the neighbour and indeed has been pea shingled and left to have weeds growing through it. Nevertheless, the sale value is high as they know the worth to you and they know at the end of the day that if you wish to proceed with the garage extension in this case then you will have to pay the price, so to speak. It is very much a good will sale from the neighbour's part and a skilful negotiation on your part.

Can you live with the consequences of garden grabbing?

The first question to ask is not should you sell the land or at what price, but can you live with what is proposed to be built? Will it, for example, overlook your garden, would you lose trees that you have become used to and grown to love in the garden? Will the garden, although still a reasonable size, feel cramped because you have been used to a larger garden? If you can happily answer all these questions and have faith that the builder will actually build what he is proposing then we suggest that you form a group with the neighbours whose land they propose to buy and negotiate as one, because divided you will tend not to get as good a deal, whereas working together not only will you be able to see the whole picture of the development, the developer will know that one agreement and he has the complete deal.

How much is the land that I am selling worth?

In the case of a development where a number of houses is going on it, such as is usual for this, a very broad rule of thumb is to take the end value of the properties, and make this realistic (the Land Registry is a good starting place for information on sole property prices), the value of the house if you take between 20% and 40% of it then you have the sort of area that will be paid for the land, depending of course on how buoyant the market is and how good/easy the development will be for the developer.

Going to other developers

If you do manage to get all the land owners to work as a group (we often find that one or so splits off, feeling they can do a better deal for themselves) then it is also worth putting the land that you have out to tender to see what bids it will attract. In our experience it is important to be seen to be fair with the developers when you are carrying this out and have a fair sealed envelope process and a set time for it to be opened and certainly not to make it into a Dutch auction.

If you need help and advice with regarding property and land values and issues please call 0800 298 5424 and a chartered surveyor will call you back for a chat.

Please note we are independent chartered surveyors.

We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).