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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To take a huge risk on the dream of a lifetime?

24 replies

ethelfleda · 02/08/2019 22:30

DH works in architecture but It’s our dream to become property developers!
We have viewed a property that is worth twice what our current one is. But it has enough land to get planning for a second home. Obviously, there are many different ways we could profit from this!
The house isn’t far from where we live, is slightly better for commuting, is in the country side and very close to DS’ nursery.
We could get the mortgage and afford the repayments.
But I am absolutely terrified of it! We are in the process of discussing putting in an offer.

Would you take a gamble in order to realise your life’s dream? Or should we stay in our humble little 3 bed semi?

OP posts:

Alsohuman · 02/08/2019 22:32

If you haven’t sold your current home, are you in a position to offer on another house?

Unicorndiva · 02/08/2019 22:34

Go for it ... if you can afford the house and all the bills involved in upsizing a house and moving And it’s shared dream then I think you kind of have to if it’s doable ... and If you can build and sell on/rent out then you have the start to your property portfolio even if it is that one house and it ends up paying a lump of your mortgage then it’s a win.

Not a decision to take lightly but if it’s financially doable then I no what id be doing

HeadintheiClouds · 02/08/2019 22:36

Will it retain it’s value with another house on the same site?

Original poster

ethelfleda · 02/08/2019 22:40

headin no, I doubt it. We could do a few bits in it to offset it but we would essentially be cutting its massive garden in half.
Our thinking was:
Move in
Get planning
Evaluate the market - if current house is in negative equity then sell off plot with planning
Or sell off the whole site as one package
If current house isn’t in NE, sell it and live in a caravan on site while second home is built

also you are correct, we haven’t sold. But we did sell this house earlier on this year (long story!) and we had five offers in one weekend. It’s perfect first time buyer territory so I don’t think we would struggle... although we can’t be certain!

OP posts:

popehilarious · 02/08/2019 22:42

How likely are you to get planning? My relatives' house had land like this, they decided to build a granny flat on the land (doesn't really affect the house) but it was denied as the planners wouldn't allow the possibility of an extra car going down that road... I'd want to be sure I'd get planning permission.

Original poster

ethelfleda · 02/08/2019 22:42

Unicorn thank you! It’s a heart over head moment I think

OP posts:

Original poster

ethelfleda · 02/08/2019 22:44

Pope
As sure as we can be with DHs background... he has never had planning refused on anything so far in his career
We have reviewed the council’s planning policy and it seems like this plot is ripe for planning..
But again, nothing is certain.

OP posts:

HeadintheiClouds · 02/08/2019 22:45

You could sound out the planning office in advance? Not for an actual decision, that takes time, but they could let you know if there were any actual restrictions and the likelihood of getting permission, all things being equal.

Pipandmum · 02/08/2019 22:45

Also be aware if you sell off the land separately to the house you might have to pay capital gains on that half as it’s not your home.

Pipandmum · 02/08/2019 22:46

But I’d go for it.

popehilarious · 02/08/2019 22:47

Planning permission is down to the specific area policy, not the background of the applicant! How screwed would you be if it wasn't granted? Would you want to live in the existing house if it wasn't for the land potential?

Alarae · 02/08/2019 22:48

Would you be able to split the plot to build a house if its mortgaged as one title?

popehilarious · 02/08/2019 22:48

Yep also make sure you get advice on selling the land and property (if you do) in the right order, and get everything - everything - from your potential buyers in writing...

growlingbear · 02/08/2019 22:52

Our local planning office is much nicer to people who ask for their advice in advance than people who submit plans without consulting them. Why don't you meet with them and ask them?

SunniDay · 02/08/2019 22:55

Hi,
I'm sure it's not insurmountable but factor in that if you have a mortgage you can't just go splitting the title and selling parts of the property as the full property and land is the banks collateral against the mortgage.

I guess you would ask for permissions and pay for valuations with your lender (or another lender and settle the first mortgage) to get them to agree that they are happy with the loan to value and lending against the new proposal. You definitely need to find out more about this side of it. You might need a new mortgage product to do it so you might want to get a mortgage with no early repayment charge in the first instance.

Twofurrycatsagain · 02/08/2019 22:59

If it works it would be brilliant. But planning is a mysterious beast at times and depending how you do it capital gains can bite.

SlipperyLizard · 02/08/2019 23:00

As well as all the other points, you also need to consider whether there are any restrictive covenants on the land that prevent development. These can usually be removed with the consent of whoever benefits from them - but they will extract a price for doing so, which would eat into any profit.

You should be able to look on the land registry to check this.

Mouikey · 02/08/2019 23:04

Planner here, my advice is pay for pre-application advice in advance of buying. The cost to you would be negligible but give you a level of certainty. It’s also (unless FOI’d), confidential.

Original poster

ethelfleda · 02/08/2019 23:07

Also be aware if you sell off the land separately to the house you might have to pay capital gains on that half as it’s not your home

I know - but thank you! This has been factored in to our very rough figures.

OP posts:

UbercornsGoggles · 02/08/2019 23:07

Personally I wouldn't be taking a potentially risky property decision until I knew what the fall out from Brexit will be. And I speak as someone who has done this with property in the past.

Original poster

ethelfleda · 02/08/2019 23:12

Thank you for your replies - this is why I love mn! We need this idea picked apart before we make a decision...

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Original poster

ethelfleda · 02/08/2019 23:17

Thanks ubercorns Brexit is certainly a consideration

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Greeve · 03/08/2019 04:23

Yes just because the space is there, doesn't mean you can build a house. Wonder why nobody else has. It's a bit like when you see 2 cash points and a big queue at only one of them while the other is empty. Are you smart or stupid for going to the empty one?

Life hack: if you do try the empty one and it isn't working, pretend you only wanted to check your balance.

Original poster

ethelfleda · 03/08/2019 09:20

Greeve we are aware of that - thank you
Totally understand the planning process isn’t straight forward but DH has worked with that council before - it’s his job to try get planning for his clients and hasn’t had an application refused yet. We’ve done plenty of due diligence on the planning side - bar a pre-app meeting which has been suggested here (and we may well go for!)

Thank you for your replies!

OP posts:

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