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Q&As
Developing ambition
I am thinking of selling my house and large gardens. Rather than sell as a house only, I would like to apply for outline planning permission to demolish the house and build up to 10 detached houses on it. My ideal solution would be a hassle-free sale to a developer after OPP is received so that I can move out and on to my next house. How attractive is my house with building land to a property developer at this stage? And how much is a developer likely to be willing to pay for the property with OPP if each house is eventually worth £250,000? Any developer would still have to get detailed planning permission, demolish the old house and build and sell the new houses.
Answers
Once OPP is granted, you have precisely the commodity that developers want, and once you apply for planning permission they may even come knocking. As a rough and generalised rule
of thumb you would expect a developer to pay you in the region of 35% (give or take 5%) of the final sale price of the finished houses. So, 10 houses at £250,000 gives the developer a gross return of £2.5m, meaning they should be prepared to pay you in the region of £875,000. But, be wary of such a simplistic approach. For example, a developer building that many houses might be required to ensure a percentage of them are affordable, there might be substantial payments to be made to the council or problems with the capacity of sewers. In fact there are many factors that could influence the price. With big money at stake, make sure you get good professional planning advice to optimise your planning permission, then make sure the site is properly marketed to get the best price.
