Is selling your garden off a good idea?

[wateraddict]

Hi wise mumsnetters. I have an older relative who has a huge garden and it's getting a bit much to handle. See 1 in diagram for their house. At the end of their garden is the back of another house with a much smaller plot of land, number 2. The neighbour has written to my relative offering a sum of money to formally buy the end of their garden and move the fence to a new agreed boundary.

They are keen to retain the value of their property but can see the benefit in terms of workload for them. The garden is laid out in such a way that you cannot see the end of the garden as structures half way down block this view from the house, so it would look no different on first glance. Pending formal valuation of the land, if they pay a fair price and instate a fence to a new agreed border as per the diagram, would this be a good idea?

I would be grateful for your opinions and any tips for things to look out for. I think in all honesty my relative will need to move house in the short to medium term so is it better to sell with a garden that matches the immediate neighbours?

Thanks in advance

I would be concerned about it affecting the resale value of the property tbh. If it’s a sizeable family home anyone buying it would want a family size garden.

How much land is it? If it's 50 feet of a 250 foot garden it would be better than 20 feet of a 100 foot garden.

If I was looking to buy that house I'd wonder why my prospective garden is smaller than the neighbours. I'd leave it if I were you. Would the cash for selling the garden now be massively beneficial?

I will see if I can get some measurements. It will leave at least 3/4 of a sizeable garden. An estate agent/ buyer view might be the most important one here. Relative's house is a small bungalow on a large plot, it is not a family home.

I'd be worried about what the neighbour intended to use the land for. It could end up as a swingers hot tub/sex pond.

It's fine, sell it, there's still plenty of garden left

Selling a portion of your garden can be very lucrative, but it depends on the area. Check how much the value of the property would drop and make sure you sell for more than that.

Maybe they could just rent it to them for a small amount instead? I wouldn't sell it unless I really needed the money.

A bungalow on a large plot will be redeveloped when it’s sold. It will probably become a family house. I would ask an agent for a valuation for this possibility with and without the full size garden.

They don’t have to sell the garden. They can have a lease agreement. That would require negotiation and a legal agreement but it could be done. The neighbours get use of it for a fee, and maintain it, but they don’t own it. Lots of farmland is managed like this.

If sold something else to bear in mind is would it give rise to Capital gains tax.

We moved into a house 10 years ago where this had happened. The house used to be on a big plot of land and the previous owner sold half off and another house was built. Our house was much cheaper than the neighbouring houses so it obviously did affect the value. It may be different in your situation as it's a small portion of the land but I would think very carefully before selling it.

You might get PRR for the sale of the land regarding CGT but this could jeopardise the PRR for the main residence when the time comes to sell. Far better not to sell!

As a current buyer I'd advise not to sell it.
We have viewed two houses on the same street recently and one of them had sold part of their garden and a house had been built on it. Not saying this will happen but once it's theirs they can do what they like. Despite having an OK size garden still it did put us off and bring the price down. Especially because you could see what the neighbours had and compare what you could have had, what you were missing, if you see what I mean. We would have offered on that one if not for that. Anyway we offered on the other.

My experience is that houses on the same street sell at the same time for some reason and obviously this will make yours less desirable.

That meant to say once one house on a street comes up for sale lots of others on the same street tend to come up at around the same time

I can see that it would be a benefit for your mum. However a couple of years ago we went to see our dream home, a beautiful Edwardian house with lovely front garden. Only when we viewed the back of the property, we found out that a huge part of the garden had been sold off, and a new build was there, looming over the house. It was the loveliest of all the houses we had viewed but that totally put us off. It might be the best thing for her though, and that's what matters at the moment.

Can she put a covenant on the land to say no dwelling and no outbuildings above a certain height, or something similar?
I'd want them to [pay all of the fees and expenses as well.

Or maybe they could lease it?

You might get PRR for the sale of the land regarding CGT but this could jeopardise the PRR for the main residence when the time comes to sell. Far better not to sell!

Why post with acronyms and no explanation of what is meant? Posters do it all the time and it looks like they've just googled.

PRR is private residence relief op and means that sales of part or all of your main residence are usually exempt from capital gains tax. If the garden is sold before the house neither should be affected, and the gain tax free. Thee is also an annual capital gains tax allowance which often absorbs small sales that don't qualify for relief.

It's complicated to explain in a post so here is a link:

www.taxinsider.co.uk/selling-your-garden-separately-does-private-residence-relief-apply-ta

I would be cautious. Your diagram is very basic however my guess is that they have looked at selling and been told that they would get a lot more for development if they had more land. Bungalows are a good way of making money however with a thin strip like this they need an access road in. Personally I would never sell land under these circs.

1/ proceeds from the sale will be subject to CGT ( 40% ) so if the motive for selling was financial I would get myself a very good accountant and valuer

2/ if the reason for selling is the garden it too big ? Consider letting the plot to the person to garden it with a properly drawn out agreement that you can reclaim land at a time you wish

3/ if the small bungalow is in a decent sized plot the future selling point might be planning for a replacement dwelling which of course would be much bigger and in balance to the footprint of the land

I would be hesitant with any decision and cover all possibilities to get the best achievable outcome for your relative

Sex pond 🤣

It's a good idea OP.
You said the garden is getting too much for your relative.
They could use the money to make their life more comfortable eg adaptations to their house or a carer.

*Move along
*
On what grounds are you saying capital gains tax at 40 % applies? There is private residence relief and (when I last practised, will check) an annual allowance for cgt.

Would buying your relative's garden then give the neighbour enough land to build a house on that land?

Or if they didn't build on it, park a caravan on it for their teens to have all night parties

Imagine how your relative would feel if she thought she'd sold a bit of garden, then was faced with planning permission she had no grounds to object to and had a house built overlooking hers.

It would be much better for your relative to rent the neighbours that bit of garden and lay down ground rules about what they could put on it - like no caravans/motorhomes, sheds, animal pens trampolines swings hot tubs, basketball hoops, goal nets so she'd not be bothered with noise, smell and inconvenience.

One month notice by either side and the land must be returned in the same state it was when initially taken over.

What if another home was built against your mothers new boundary line, would it bother her? It would bother me.

I replied to the poster who mentioned capital gains tax. I flagged up the relief and the dangers of using it for the land and then not having it for the main residence. It got the notion out there! Just mentioning CGT wasn’t helpful either with no explanation. So I apologise for not using the full words!