Inherited land/house dilemma

[JaffaBiscuits]

Very, very privileged to have inherited 1 acre of land, with a 2 bed cottage. The cottage itself is uninhabitable, location semi rural.

This is completely unexpected - DH and I have been saving up the past 15 years towards a dream house, we have decent cash savings.

Would you

1. spend all savings building on the inherited land
2. sell it as-is (worth £250k) to add to the savings pot
3. try and add value (apply for planning permission?) before selling
4. spend a portion of the savings to build a house/cottage to rent out
5. something else?

I'm overwhelmed and don't know which way to go. I don't even know if our savings would get us far building anything. I'd have to use a company to manage it all. I have no motivation, time, energy or knowledge for a self build! It's not a location DH or I would choose to live, either.

Would love to hear any thoughts!

I think I would speak to a local estate agent who specialises in these sorts of properties and see what they say about the likelihood of getting planning before you do anything. Also ask about any potential for splitting the plot, some with the cottage and another bit to be retained or sold separately, depending on what they say, West Country would be Jonas Carter or Greenslade Taylor Hunt.

My neighbour’s house has been bought by a developer. They’ve stripped it out and made it so no longer suitable for a residential mortgage. They have planning to build into the garage and extend the roof height to make a bigger house and have just put it on the market for 110k more than paid 18 months ago. Hard to imagine they will get anywhere near it, we’re all 😮but watching with interest.

Get outline planning permission for a larger house and sell.

the emotional pressures put a different light on the situation.

Offer to sell the land to another family member to 'keep it in the family'.

Otherwise can you rent it to a local family /farmer until you are in a position to sell?

Sell it with PP.

Get it valued, and offer it to the family on first dibs. Do not reduce the the price for a family discount.

Sell. I wouldn't bother with planning - it's already got houses on it so only thing would to try and increase the amount of housing permitted and that could cost you considerable time and money.
Also too much to build and rent out - again time and it ties up all your capital.

Option 5
Sit down and work out the costs/profits for each of the options before making a decision.

My personal choice

• assuming the location works, then sell up and do a self build on the land. Did it once and it was the best thing ever
• if the location doesn’t work get outline planning consent for the biggest square meter age you can on the land then sell as a development plot

would 1 acre of land without planning permission really get 250k?

Tell them it’s been deemed structurally unsound and the recommendation is that the building is condemned. You can’t afford to live there and there is no work in your industries that pay commensurate salaries. It has to be sold.

If you never want to live in that location, sell it.

You can sell with an overage where you get a certain percentage of the increase of the value if/when planning is granted. So you would see the benefit but not have to do the work.

Other option is to sell conditionally where a developer does the work for planning and only buys it if it's granted.

Both of those would mean you benefit from any uplift without having to do much work. You would need an estate agent who understands such things though.

@eveningbubble
It has a 2 bed cottage on it! Depends where if is, but around me that would be £600,000 with pp for a house to replace the cottage. More for 1 acre!

We have a lot of planning restrictions (AONB, green belt) but you can pull a house down, rebuild at 50% extra volume. (Basements add a bit more!) You then live in it and extend again. 50% of the new volume allowed! So it gets a bigger house and then it’s worth £1m plus. Easily. Easy if you know what you are doing! You need some money to get started though! And determination. But at the very least see a planning consultant or local architect! Forget an estate agent - unless they are a high end one!

Remember you will have to pay inheritance tax unless it came from a parent. I would sell it. I acre is just a large garden for those saying they would never sell land. You are not going to farm it or anything. Considering you have no house sell it and start looking for a nice house in your own area..no complications. Just keep it simple

Errr? No. The estate of the deceased person pays the inheritance tax. The person receiving the bequest gets it after any tax has been paid. Even if OP sells it, there is no IHT to pay. There might be Capital gains tax. You avoid this by living in the new/existing house though as your main residence. No estate that qualifies for IHT is not taxed because it’s been left to a son or daughter. If it was given 7 years before they died, it would then be exempt. This property would be valued as part of the dead relative’s estate though. It’s up to the executors how IHT (if any) is to be paid. It’s worth finding out if it’s due though.

Extended family want it kept 'in the family' too. But it wouldn't be their money and stress!!

It easily can be - they can buy it from you and then their £250k is tied up in the project, not yours!

I'd vote for a spreadsheet to compare the options, and enough research to fill in all the variables so that you can make an informed decision.

PS If your dead relative wanted to bind you in somehow then they could have done that by the terms of their will. For example the house could have been left in trust to you on condition that you you lived there and redeveloped it. The fact that they chose not to do that suggests that they did not intend to tie your hands as to what you do now.

Speaking as someone who is currently building their own house in a rural location I would say if you don't feel up to that don't even think about it. Which is obvious but just to confirm that option is only for the very enthusiastic and committed.
You can acknowledge to family that the deceased may have had a motive of desiring you to keep the property in the family but that sadly your personal circumstances make that option untenable therefore you will be doing your best to do right with the inheritance by utilising it to best effect but that living there isn't an option, give them first refusal but don't give it away, emotional guilt or not, a specific location that doesn't work for you shouldn't be left to rot when it could go to someone who will love it.

On that note I would like to draw your attention to the national planning policy which is prior approved planning permission. Basically in an effort to support increase in housing stock, bring disused buildings back into habitable and help rural communities the nation has a criteria for locations and buildings that will be fast tracked for planning permission, without the need for detailed plans from architects. You only need outline details and if the place qualified it will be granted planning permission. The local authority can't overrule it (though they can put conditions on it like not overlooking neighbours, not disturbing bats... Just sensible things). Once you have that any buyer will have the confidence they can proceed and it's up to them how they do it, they won't be tied to your architects plans. It is much cheaper to achieve than standard planning permission. It is what my own build project was approved under, it's a good simple system. Link here :
www.planningportal.co.uk/info/200126/applications/60/consent_types/10

That way you could increase the value with minimal cost/hassle to yourself (relatively speaking). Worth looking into. If you're in the NW I know a good land agent who would do a great job of handling that kind of sale. The person I bought off actively sought a family who would use village school and be part of the community (so not a developer) which was a nice way to give a bit back and might mollify your family.

You'll have more luck googling Carter Jonas (not Jonas Carter).

OP I know you said that it's not a location that you'd choose to live, but is it near to where you currently live? Or the other end of the country??

What are house prices like in the cottage's location?

If it's a long way away, and the ceiling price isn't many multiples of it's current value, I'd be inclined to sell as is. I certainly wouldn't be renovating/ building.

Gosh, that's a nice dilemma to have!

I would definitely consult about getting PP before selling because, as several have said, you could find that with minimal outlay you increase the value of the land massively. It depends very much where the land is, if it's in the local plan, how good access/infrastructure is - but having a building on it currently will help. So Option 3,

Do NOT submit to emotional blackmail from relatives - I'm sure whoever left it to you just wanted you to be happy, and if that means buying your dream home with the proceeds of sale then so be it.

You'll have more luck googling Carter Jonas (not Jonas Carter). wink

Oops, sorry about that ! There’s me trying to blame the DC’s dyslexia on DH’s side of the family 😀

@JaffaBiscuits

Unless the situation is complicated by emotional blackmail/ expectations/ threats of "disappointment" or "sadness" from extended family if you don't keep the land in the family for sentimental/ historical reasons?

Very much so, unfortunately. A close family member has said how much she wants us to build and live there 'and that's why is was left to you, to keep it in the family.'

Extended family want it kept 'in the family' too. But it wouldn't be their money and stress!!

They can buy it if they want it

id think about splitting the land and selling it in 2 lots, one with the cottage and one without (potentially with pp)

@TopCatsTopHat
If only! You might find AONB and local plans and green belt override the need for more local housing. The local plan for my area doesn’t even include brown field sites, let alone redundant farm buildings!

Tizerorfizz have you looked at the link? These national plans of Prior Approved Planning override local plans and local authorities as far as I know. I am in the Lake District and because it was an (uninhabitable) existing building it qualified. I'm not saying it is a one size fits all and it's definitely the answer for you, but unless you've actually checked it out, you might be, possibly, surprised.

They do not apply to all building sites! They are very specific.