how much land is needed to build a small detached house?

[sillyily]

Long story short, there is a parcel of land adjacent to our new property for sale very cheap. Noone else would have any use for the land as it is very long and narrow, and not next to anything else. Current owners didnt even realise they owned it until previous owner looked into it.

We're going to buy the land, and would like to chop our long garden in half, add half of this plot of land to create a large plot for sale. the dimensions would be approx 50ftx25ft. would this be enough for a developer to build a detached house? ie, would we be likely to sell this land? I think it seems to narrow, but dp thinks it about normal. We could extend the length of the plot, by cutting into our garden a bit more, but couldn't extend the width... also, a garden would be desirable for this area, but I don't think somebody could fit a house and garden in that small space....

TIA :)

Speak to your local planning office and get their policy notes on infill/garden development.

Also get recommendations for local architects and ask them for fee proposals and initial thoughts.

Speak to local agents about what it might sell for.

Do lots of careful sums and look at the implications of capital gains tax.

Making money as a property developer is a fine art and not at all easy in the current climate.

Good luck!

Oh yes and you will need a lot of ready cash as finance can be difficult to come by.

Finance for land is almost impossible to get hold of in the current economic climate, so land has very little value compared to previous times. Well, this is the case in my area. This could well impact prospective buyers.

Having said that, I love a building project, so best of luck.

I echo tricot- you need to find out if you would be likely to get planning permission.

Also, if your house has a mortgage you would need to check with them- losing part of your garden may affects its value which may affect your mortgage.

have a look at homebuilding and renovating magazine online - there's a section online where you can ask for advice.

Wow lots of replies
Thanks all, I will contact everyone mentioned for advice.

Didnt think about it affecting our mortgage. We will be buying the patch of land for three grand so will prob use savings for that as its not much. Lots of land has been sold to developers in our area recently for a lot more than I was expecting. I would love to prpject manage a build ourselves but would feel it was way out if my depth.

Does the plot size sound feasible to build on?

Depends on what you want to build!
You could overdevelop and squeeze on a big house with minimum garden (and then struggle to sell) or tuck in a neat little starter home. What is required in your local area?

Basically You need an architect.

And based on the fact that you hadnt thought of speaking to the people that i listed i would be wary of project managing. It does sound like your learning curve would be steep expensive

Many moons ago John Prescott had an initiative running that affordable homes should be built for about 70k. That's a big ask. The site fee is the tip of a large iceberg of build costs, permissions, professional fees........ I dont want to put you off but i think you need to buy a self build book before you do anything else!

Tbh, this is merely an idea we are floating around atm. We have made a decent amount of money on our first property from buying at auction, and want to maximise the amount we make on this one, so exploring every avenue. I am not in the right state of mind to take anything on massive- i am only 21 and have very little life experience aside from 2dc's as u rightly said, got a bit of learning to do yet :-)
Would probably be a case of buy land, knock down the boundary, sell land.

Advice has been great- anything else u want to feed my mind with would be greatly appreciated!

Ignore my appalling grammar. It's too late for me

You might be better to buy land, get planning then sell land after changing the boundary. I think that would get a better return while minimising risk/capital spend.

But you might have to wait a long time to cash in if others cant get finance to build.

If for some reason you couldnt sell you should also check with the planners about adding a garage for your house. Or an extension. 3k seems like a good price for that much land if it is difficult for others to use but maybe it is worth more as part of your garden? An estate agent could maybe help with that too.

You might never have to.do any of the plans and simply would be able to sell on the "potential" to someone else in the future.

Obviously value added to your own house is more tax efficient but maybe it is worth less than a separare development.

Also would you want someone else's building works going on next door?

Sorry about the rambling. Lots to consider and really interesting project to tackle! I'm impressed at you considering all this at your age btw!

Slightly different point - you might have to pay income tax, not capital gains tax, on the profits depending on how the deal with the developers is structured. So if you do get that far please take tax advice as income tax is usually a lot more expensive.

tricot We would probably get planning, sell the house, then sell the land after.

I can imagine we would make a lot more selling the land separately, than if we were to extend the house. The house is already a decent size, and wouldn't necessarily benefit from any extra space/rooms.

A similar plot of land in this area, with opp, recently sold for £69k. It was on the market for about 5 months.

riksti - under what circumstances would we have to pay income tax as opposed to capital gains?

Ooh forgot to say. Send off for public utilities searches - the land may be cheap for a reason. An architect friend of mine bought a site with a sewer running under it and tried to work out how to squeeze a small house for herself on there. The costs just never stacked up because it got really complicated (piled foundations/party wall awards etc etc) and they eventually gave up :(

Ok- will do. I think the only reason it's so cheap is because it's so narrow that noone can use it, except us, as we can add it to our boundary. The current owners own a lot of the houses in the area, and weren't even aware they owned it. Our vendor contacted them and they asked for 10k, he said 1k, they met at 3k.
I will get a search sorted though just in case

It's an anti-avoidance provision for people who are trying to treat massive development profits as capital gains. Unfortunately it catches everyone, not just the big tax-dodgers.

Basically, if you've acquired a piece of land with the intention of making a profit you might be caught. A simple 1) buy land, 2) get planning permission, 3) sell to developer, would be a capital gain. However, if the sales contract entitles you to a percentage of developer's profits, for example, then HMRC might want to tax the profits as income instead of capital.

Ah ok, thanks. So it should be capital gains in my case then?
Any idea how much cg tax is?

First 10,600 of the gain is free. After that it depends on your other income. If you've got some of you basic rate band left then the proportion of the gain falling to basic rate band is at 18%. Everything above that is 28%

right ok, Thanks.

And thanks for all the previous advice too. Feel like I know what I'm doing a bit more now!