Knocking down a house or leaving it empty?

[hettie555]

I've inherited an old house in a bad state of repair (although walls and roof is fine) on a lovely plot.

I can't afford to rent it out as it needs so much improvement (entire re-wire, new kitchen/bathroom & windows) to it those costs wouldn't be covered by the rent I could get, plus I don't want to be a landlord.

I plan to knock it down and build a bungalow on there for my retirement in a few years.
I have mobility issues and the current house isn't suitable - that's why I want to knock it down.
I can't move to the house myself now as it not suitable re work / kids. I don't want to sell the house/plot as it was left to me specifically to help me move back to the area I grew up in - if I sell it I would have to share the proceeds with other family members and I will never be able to move back or become a home-owner.

I'm not very well off and have to be careful with money, I've been so lucky with this inheritance, but I've not got any other money or assets.
As I understand it I will have to pay council tax on the house (this rises to double if the house if left empty).
Can I just have the house knocked down now and save myself several years of double council tax and whatever costs might arise from leaving the house empty?

Are there companies/builders who buy reclaimed bricks/roof tiles that might help me pay for the demolition?

Anyone got any bright ideas?

Isn’t there a loop hole that, if it doesn’t have a kitchen & bathroom, it’s uninhabitable so exempt from council tax?
I’m aware of a builder who leave them uninhabitable whilst doing other properties up first to make them exempt.

www.counciltaxadvisors.co.uk/council-tax/empty-dwellings/
However, if you feel that you own an empty property that is uninhabitable, you might be eligible to be removed from paying Council Tax for empty dwellings. To do this, simply apply to your local valuation office agency for the property to be removed. This may provide exemption for a period of time subject to the policy of each individual council

You might want to look into planning. Firstly, don’t assume that you’ll be able to replace the property. Secondly, it’s probably easier to get planning approved for a replacement dwelling vs building sth from scratch.

You might also like to approach the council to see what the rules are for uninhabitable properties re council tax. Or see if someone might like to rent it for storage etc as it sounds water-tight.

Planning permission for a bungalow might not be automatic. The planning officer might be willing to book an appointment with you to discuss it. You can draw your own plans, perhaps take photos of bungalows you have in mind.

Forgot to say I already have planning for the new bungalow and have been told that even if planning lapses I will be fine (plot is on its own, no other houses nearby - very rural).

A little to unpick here. You say that if you sold it then you would have to share the money but if you keep it then you don't?

Demolishing a house can be really expensive. You cannot just knock it down and leave it, you have to remove all the bricks etc and that can cost - even before you discover the house has asbestos etc. It's possible you might be able to get a little back from reclamation but this is likely to be a fraction of the cost of the whole demolition.

Unfortunately you've been given an asset that is somewhat of a liability. Just owning it is going to cost you money and as its not in a state to be rented can provide no income. The simplest and easiest option would be to sell it as it is and use the proceeds to buy your bungalow.

There are potentially other avenues you could pursue. Selling a short term lease to a property developer who in return would do the improvements and get the right to use the property (rent out) for a fixed period, say 10 years. Not sure you would get too much up front but you would get the property back after a fixed period in a better shape. I would investigate which local estate agents are respected and have a word with them.

but I've not got any other money or assets

How will you fund the bungalow build?.

Thanks Toby for your long post, but you didn't read my post properly, I want to keep the plot and not sell it.

If you have no money or assets other than the house I don't understand how the plan will work whenever you knock down the house - demolition and rebuild will cost a good chunk of what buying a house will, far more than a house deposit. If you couldn't afford to be a home owner before this inheritance then I think it's a bit of a (well-intentioned) poisoned chalice because you can't possibly afford to actually use it.

OP - @TobyHouseMan didn't say sell the plot, they said sell a short term lease to it

It's a great suggestion - you could get improvements and income and keep it!

Out of interest, why would you have to share proceeds if you sold it?

Is the plot big enough to put a static caravan on it?

@hettie555

I suggested you sold a lease, not the house. Selling a lease gives someone else the right to use the property for a fixed period of time. After that the property is your to do what you want with. I could be a win-win situation which sees you in 10 years time with a property that is up together.

If you have no money at the moment then you have very few options really apart from selling it or leasing it out. Even if you did decide to knock it down and build something at a later date, how would you fund this? Building houses is very expensive.

I think selling a lease is the best option by far, the issue will be finding someone who wants to buy it - having to do such major work to a property for ten years' rent would only really be attractive if the property is somewhere very desirable and so would attract a very high rent.

@BernadetteRostankowskiWolowitz

but I've not got any other money or assets

How will you fund the bungalow build?.

I will get a new build mortgage, my broker thinks that will be no problem. I have a few mortgage possibilities lined-up as the plot itself is worth a good amount so I have had no problems getting finance for the build (which I haven't taken yet of course).

Sorry I mis-understood your post Toby I would be interested in a short term lease, even one that is 20 years old (as I'm not that close to retirement yet).

Other than ask local estate agents, is there anywhere else I can try and find someone who might be interested?

The house would be good for holiday let's as it's quite large - so maybe a developer might be interested in that angle?

An estate agent would be a good place to start - they have the ability to post on rightmove and filter out people, they will know the legals and can give you better ideas than me.

Good luck.

Is there an option for you to split it into 2 flats at a later date... downstairs for you, upstairs for rental income? Then you could extend the house appropriately vs building from scratch...

Is the plot big enough to put a static caravan on it?

Pretty sure that would need planning permission if you are implying that they live inside it.

How long is a ‘few years’ before you move there because builds can take a while so you could just start the building process now, build the bungalow and reassess whether you could rent it out when finished. Any good builder will be booked up months in advance if not a year anyway.

In the op, it says I don't want to sell the house/plot as it was left to me specifically to help me move back to the area I grew up in - if I sell it I would have to share the proceeds with other family members
Was this in the will of the deceased person? Any other restrictions on how you used the property?

I read it that if OP sold and received £££ for the property and land she would be expected to share out the proceeds amongst other family members, whereas you can't share a house. Might be wrong though.

Do you own the house outright? Having to share if you sell implies you do not?

Is the plot big enough to split into two? Could the house be sold and you build a bungalow in the grounds?

Speaking as someone who often does lease options, I’d only really spend money on a property that I’d have the option to ultimately buy. Or if the cashflow/ income was decent enough to make it worth my while for the life of the lease.

If you’re able to get a mortgage to build a new bungalow, why aren’t you doing that now?

Build it and let it out, fully managed by an agent you wouldn’t need to deal with the day to day running of it. Depending on your location, there are companies who will take the property for a long term 10 year lease, you get a guaranteed rent, no maintenance or voids.

Another option would be to build your bungalow now, then rent it out untill you want to live in it. I know you said you don't want to be a landlord, but the cost of knocking it down would be cheaper if it's at the same time as rebuilding, and you could pay off your mortgage now from the rental income so you own it outright sooner. You could let it to a company to manage it long term so you have nothing to do with it day to day.

I wouldn't be too confident about letting the planning permission lapse- if the local or national planning policy changes they don't necessarily grant permission again.

Cross posted my bright idea with @SpaceRaiders! I should remember to refresh before I type!