Building a new house in the grounds of our current house

[kennelmaid]

We've got planning permission to build a new house in the large garden of our current house. Our house is too big and draughty for us and we want to build something more modern and compact. We are both retirement age. We would have to sell our current house and live on the site in static caravans to fund the new build.

We know that doing this will devalue our current house. We have considered other options such as selling the lot and moving on, or selling the land separately to the house for someone else to build on.

Does anyone have any experience of building a new house in the garden of their old one? What are the drawbacks?

We had neighbours who did this but they built prior to selling the main house. I think selling might be harder if people discover they'll then have up to a year of building noise and mess at the end of their new garden.

Getting the legal title separated first would be important, then getting services to that part of the land. Would you definitely not need to access the existing garden to complete the build?

Have you explored the option of a bridging loan so you could stay in the original house while doing the new build?

It is going to be much easier if you build THEN sell.

People won't like the building noise and will fear the unknown - my DH most people can't imagine what knocking a wall down or redecorating a bathroom will do let alone a house being built in the garden.

Remortgage or bridging loan to build then sell would be my recommendation.

Selling the house with its grounds and moving somewhere new that suits your needs seems so much simpler! What made you decide against that?

You could possibly come to a deal with a local developer - they build your new house (please tell me it has it's own street access!) then you give them (or sell them for a much lower price) your existing house.

It's on a corner plot and we can easily create access directly from the road to the new house.

We haven't seen anything for sale that suits our needs in the area we want to live.

I'm not overly keen on living in a static caravan while the new house is being built. We could look in to getting a bridging loan as long as they would wait for repayment on the sale of our house.

can you separate the title and build s new boundary fence.
that would make the big house more attractive to sell.
are you sure you can get access to the new built from the other street?

My parents investigated this at length. They were advised that by the time the new house was finished there old house would have risen in price to match the loss of land.
They did not get planning permission so they didn't go ahead.

Might be worth talking to a bridging loan provider, they are not cheap. However often you don’t have to pay anything until you “close the bridge” i.e. sell your existing house.

Do you have a mortgage on the current property? That will make a big different to your financing options. When are you thinking of splitting the title deeds. Another option might be to split the deeds, then get a self build mortgage for the new plot while living the current house if that’s mortgage free. Some experienced mortgage brokers will have done this, especially if they are used to doing bridging

can you consider pre-fab or semi pre-fab foe the new built to save time (and money)?

Thanks for all your replies, some food for thought here.

We didn't build in our garden,but did build an eco prefab house last year.we lived on site in a touring caravan whilst it was built. It's wasn't too bad as if was a mild winter,I'm so glad that we aren't in it now though.
The groundworks took ages as the original builder cocked them up,but the house itself was completed,including decorating tiling, carpets ect in just under 8 weeks. We've been in nearly a year now and we love it,it's warm,quiet,easy to keep clean ( we live on a farm),and the quality is amazing. The cost was £40k cheaper than getting a timber frame company in and doing everything separately,plus you have no hold ups as no one is waiting for a tradesman to finish before they can start.

I know people who have done this. One had enough money to fund the new build and sell afterwards. The other stayed put but their daughter had a new house.

I do know people who lived in a huge mobile home. It had every convenience! Was very big! No problem living in it at all. If you can afford it, build and then pay yourself back from the house sale. If you need the sale money you will just have to fence off the plot and see if buyers are ok with your building disruption.

Seems something rising in popularity..
Have viewed a couple of houses where they’ve done the house up and want top dollar then seem to expect the buyers to put up with a year or whatever building noise whilst they build their new house in what should be your garden and possibly looking out of your bedroom windows to see people living in a caravan! Usually spot it now before wasting our time with mentions of shared drive or the garden looks disproportionately small for a large Victorian or Edwardian house.

If you are doing this and it’s just the 2 of you, can you not rent a small place nearby during the building works?

Lest say the land is free, you should be able to build a 4 Bed Detached for around 125k that should be worth double, its a no brainer for me, its hassle for a year or two but just look at the end goal.

My aunt just sold the old house with planning permission because she valued the lack of trouble and builders etc over the increased money. Her house was worth more, but of course it was the people who bought it who made the bigger profit.

We are renovating and doing up a derelict house we bought and currently living in a staic van in the garden. There is currently a lot of sitting snow outside, but its not as bad as I expected to live in the van. We have it plumbed into the sewer, electrics etc. A karcher window cleaner is fantastic, because we only have single glaze and they are wet every morning!

Could you get a lodger to help pay some rent if you did get a bridging loan and remained in the main house? Could the main house accomodate Air BNB? Obvioulsy not with lockdown. When are you planning on doing this?

We haven't done this but we did fall in love with a beautiful big Georgian house whose owners had built an eco house in the garden. They'd also included the swimming pool in their new garden which made a smaller, oddly shaped garden for the one for sale. We were put off as it was clearly obvious that the house was a nightmare to heat efficiently - piles of logs and kindling in every fireplace and the cellar had huge bags of more logs. It just screamed 'inefficient'. It's a shame as it was so lovely. It took a while to sell, too.

The house on the corner of my road did this. New house to the side with it’s own road frontage (corner so two roads). Old house didn’t sell until after new house was built and had sold. But then it needed a lot of work and seemed overpriced. Looked like a probate as old house was empty.

@redcandlelight

can you consider pre-fab or semi pre-fab foe the new built to save time (and money)?

Yes I would second this. Look at Huf Haus - they are amazing. You make all decisions, right down to where every plug socket goes, in advance. They make the house in pieces in Germany. It is shipped over and constructed in a few days!!

However, I don know at what stage you have to pay for it. So the speed of construction may not solve your financing problem. I agree with looking into bridging loans. Do you have a big mortgage on your existing house?

Sarah Beeny on Netflix had a series about mortgage free people - one was an end of terrace and they built a modern detached build at the side. They rented out the terrace after they moved into the detached and then eventually sold both and moved to the country

Why can't you mortgage your own home and use the money to build a second on the plot? Whilst you have the builders in get eco friendly heating for both home, and ground source water for both? making your original home more desirable as cheaper to run

Getting a bridging loan could be risky, if our current house didn't sell or took ages to sell, we'd end up paying a substantial amount of interest.

Right now, my preferred option is to sell our current house and rent while our new house is being built. We'll put up a fence so any potential buyers will be able to see exactly where the boundary is. Our drawings/plans would be available for them to view so they can envisage what the new house would look like. Then, it would be up to them to decide if they could live with building noise but a timber-frame house can be built in 12 weeks from start on site to moving in so not long really.