Think about the length of time you will have to live with all the fall out from building work. I've watched a couple of back garden developments nearby recently and they have all caused hell (traffic related, mess). I dread to think what it was like to actually live next door to them.
You can get the developers to apply for planning on your behalf; you don't have to own the land in question in order to make an application on it. I'd offer it subject to planning and negotiate an appropriate price on the basis that they get it.
My ILs have recently done this. They sold it on a conditional contract to a developer - this means that the land was sold conditional on the grant of planning permission for the build that they intended to put on it ie if planning permission were to be granted, the developer would have to buy the end of my ILs garden at �X. The �X was the subject of much negotiation, and it is much more than the reduction in the value of their house without that land.
They have a substantial garden, and they decided how much of it they could live with keeping. That turned out to be about 80 feet, and they have sold about 80 feet. I think their neighbours will have ishoos with it too.
Work hasnt started yet. The grant of planning permission says that work must start (note, not finish) within, I think it is 5, years. So they will probably decide not to sell their house until the work has been substantially completed, as who would want to buy their house knowing that there will be a building site at the end of the garden?
I take it that there is other access to the land that isn't through yours (ie access to the land doesn't rely on the grant of an easement from you)?
Going on the experience of a friend who has done this, your neighbours will hate you and you will find it near impossible to sell your house if you need to when building is going on (which could take several years). They too will find it impossible to sell their houses and moan about it a lot and hTe you even more.
If you're going to do it, don't sell the land off too cheaply. Put a value on how much disruption there will be to your home over a substantial period, as well as the diminution in the value of your property. And then add some.
My friend lives in one of 2 lovely detached homes that were built "in someone's garden". The original owners still love in the house, and neither of them has to work - although only in their 40s when they first sold the land......
I am someone who has bought a plot of land that originated as someone's back garden. It's not easy, no one likes change... Building a house is messy, noisy and disruptive. We'll be finished soon and hopefully in a short while it will look like it has always been there.
It depends on the area IMO. If it's a highly sought after area and plots are rare then you can charge what you like and developers and individuals will fight it out to secure it, plus you can put any restrictive covenants you like on it (as people will be so desperate they'll agree). For example, we need to have finished building within a year and have restrictions on what else we can do to the property in the future.
If you can live with the garden you'll have left, then it's a great way to pay off the mortgage. Getting planning permission yourself and selling on the basis that that is all that can be built on it is about the only way you'll have control over what's at the end of your garden.