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We own one of the properties in a parade of 4 large detached properties (see image below).
Total area of land occupied by all 4 properties: 2,650 m2
A large development of flats has been completed 300m up the road. The plot neighbours a farm on one side, college on the other and the college car park to the rear. We think the land occupied by all of these properties would be valuable to a developer and want to check whether our assumptions are correct.
How many flats can be built on this land? Total potential GDV? How or who do we go to check this?
How do we approach our neighbours to make this happen? 'Option to sell' agreements or JV with them? What's the best way to structure this into a win-win for everyone?
If they were to agree to sell/JV, should we apply for planning permission then offer the entire lot to sell?
Is this even possible or am I barking up the wrong tree?!
is it the plan to knock down the house or build in the back Garden.
Assuming back garden only, how will you get access?
what value will the house be worth after removing of the back garden?
what does the local development plan say about the area?
The plan is to sell the entire 4 plots to developers to do what they please with it. For planning purposes, I envision that all 4 properties will be demolished and flats developed across the whole land.
First step would be to speak with your neighbours as getting four people to agree to the idea is a good start. If one disagrees then your proposal is dead in the water.
Don't be under any illusion that a developer will have an open cheque book, prepared to write you a cheque for millions.....they are looking for low cost sites, BMV sites where they start off on the front foot buying well to maximise returns.
The property market, especially for new development at the minute is tough and funding is nowhere near as easy as it used to be.
JV with neighbours unless between you, you have alot of cash, the ability to raise finance and skills to manage realistically it will be a non-starter......
Where is the property located please? You also should consider that houses have some existing value, therefore, would it really make sense to demolish them and erect apartment blocks. For instance, if it was in Belgravia then definitely would as the land values are high but probably not in Middlesborough since you might not even be able to recover your build costs.
Happy to help if needed.
Take care and thanks.
PD. Good to hear from you again.
They are located in Northwest London in Harrow. Each property is worth approx £900k
What are you hoping to achieve by convincing all of your neighbours to sell to a developer?
Do you think this will increase the value of the properties? And if so by how much?
As has been pointed out already, developers do not want to over-pay, in fact the property development business model is based on under-paying for land.
At the moment the market for development land of this size is not good at all and many similar sites are failing to sell at auctions or on the open market (partly as a result of the unrealistic expectations/reserves of the vendors).
Small, one-off developments or refurbishment projects under £250k still seem to be popular and are selling well enough and multi-million pound large national house builder sized plots are always in demand but the mid-sized developments of between 6-36 properties have very limited demand right now.
In short, the land is too expensive, the build costs are too high and the sales market is dead (mostly thanks to taxes) and for smaller developers finance is bordering on impossible to obtain. This is why some of the larger developers have switched to BTR projects.
You say that the properties are worth approximately £900k. Then why not just sell on the open market and save yourself a lot of work that, in my opinion, would be ultimately fruitless.
The similar projects I've seen have been one or two (max) properties sitting on a large plot(s) of land. Getting 4x people to be in agreement is going to be tough!
If anyones interested, I did take a crack at this and all the neighbours agreed in principle to sell their homes and were open to offers. We engaged with a large developer who had completed developments in the area. Unfortunately, the best scheme they could come up with would only work if we accepted offers that were 50% of the current sale value of each property.