Land that's been refused planning permission

[HornungTheHelpful]

I am currently looking to see if I can buy a piece of land with a derelict house and outbuildings on it. The house is unliveable - it will have to be demolished, as will all out buildings.

I would like to buy it with a view to obtaining planning permission for a new property on the site and in pretty much the same footprint of the existing derelict. We would maybe want to go slightly bigger. This in principle fits in with the "area" plans.

The current owner has applied for planning permission on three separate occasions, first for 13 houses, then for five and then for six. The current owner has been refused planning permission on each occasion and had his appeal refused on the last application as well. While there was in principle no objection to building a number of houses (not 13) on the land, each application was refused on a variety of grounds some of which related to the number of houses on the land.

There is in principle a willingness to sell but we need to agree on a price. No price yet discussed, however, I am wondering whether the refusal of planning permission impacts the value. My concern is that current owner will be anticipating an amount that reflects his hope to develop the land. I do not want to develop the land - more restore it to what it was previously - and therefore the land has a lesser value to me. In addition, it seems slightly unrealistic that he can expect to realise a value based on the ability of the land to be developed with five or six houses when he has signally failed to obtain planning to put such number of houses on it.

Things I do know:

• yes, maybe I should ask a valuer, but while I get round to getting permission to have a valuer look at it, instructing a valuer and getting their report, if anyone has any relevant experience and/or views I'd be very grateful


• yes, they will ultimately only accept what they want, but I would effectively like to know if they do want value based on the possibility of getting planning for 5 or 6 houses, I would be being completely "uncommercial" to pay it (I'm not saying that's necessarily a deal breaker, though I'm not mad desperate to get this place, but would like to know so that if I decide to go ahead on a basis where I am "overpaying" I at least do it with open eyes)

Would appreciate views. Would also appreciate views on likelihood of getting planning if I do go ahead, but I am a bit less clueless about this (and also a bit further away from it, if it ever happens, which it may well not).

Is it in a green belt or conservation area?

Is the house repairable? Is is currently classed as residential, can you get the planning permissions and pre-applications to a planning consultant? Is the land outside of a development boundary? Brown field site?

I'd be very very wary we own land and future plot but maybe 10-20 years before the boundary moves or stock is required. So technically our land is worth about 50k.. with planning 300k.

The planners/ councils have allocated stock to fill, so sometimes a small dwelling isn't on their list to approve.

But look at the new self build laws etc.

You'd need to clue up on planning fast!!

Sometimes people choose to sell land without PP but have a clause demanding further payment for "uplift" when PP is granted. The vendor will want to be reassured, I imagine, that you are just going to replace the one house not somehow finagle the multiple houses that he has failed to do so perhaps you could come up with a price based on your only building one and offer to pay more if you get PP for extra (which you're not intending to do)? It might be worth engaging a planning consultant to make sure that you can replace the current wreck first.

The current wreck can be replaced. Wasn’t asking about planning, as my knowledge is reasonable and supplemented by knowledge from the planning application refusals and those more knowledgeable. It is in the town plan for development and they are very keen to have the plot sorted as it’s an eyesore. Plans have been refused on basis they will look rubbish and will be there for ages so quick fix not on the cards. It’s in the middle of a residential area

What were the reasons for refusal? That’s very relevant.

Did the land owner submit the plans themself?
Did they use a run of the mill architect?
Did they use a specialist architect local to the area who’s familiar with local pp?
And why was it refused?
Why did they apply for 5 first then 6?
Does the council actually want more house on the plot?

Best course of action is to speak to the planning officer directly.
Ask why it was refused and speak to them about your plans for that plot.
Most of them would be more than happy to talk.

How much you pay will depend how much you want to pay. But I think you stand in with a good chance of getting PP if you’re only building 1 house and there is a house already.

But from experience don’t expect too much of a discount even if PP was refused.

Only you know what the plot is worth to you, I’m not not sure what you’re asking.

If it's already in the plan for development, what's the assumption for the site capacity? If it's in the 5 year housing land supply for 6 houses, and they just haven't got permission yet because of layout/size of homes/landscaping, then it's reasonable for the vendor to expect hope value based on that number of houses.

Those properties are generally sold with retentions. There is one for sale here. There’s no planning permission at the moment but it’s being sold with a provision that if planning us obtained in the next 50 years then further payment is due to the current vendors.

It really does hinge on the reasons for the planning permission being turned down. If they are likely to remain unchanged if planning permission is sought again, then the land shouldn't carry a premium.

You must have some idea of how much you are prepared to pay, so why haven't you asked the vendor how much they want for it?

The owner only has your word for it that you want to restore it rather than develop it. I'd be prepared to sign an overage agreement - you agree if you achieve planning for more than one dwelling within x no. years you pay a percentage of the uplift in value of the land to the person you bought it from. That kind of thing. If you've no intention of developing it there's little to no risk to you, but this kind of agreement can be for 20 -30 years or longer.

This can be accounted for by way of an uplift or overage clause - I.e. you pay x now based on the land with no development potential but if you obtain planning permission within a determined period you pay a further sum. The seller may want this but arguably the previous refusals mean the development potential is limited. You’d have to be clear whether reinstating the original buildings would count in terms of the overage clause. A surveyor is the best person to talk to in the first instance re value with and without development potential and obviously a solicitor to negotiate any overage clause.

I think that you replacing the derelict residential building would not be classed as 'development' in the planning definitive sense (www.gov.uk/guidance/when-is-permission-required) so would come under prior approved planning which is much simpler to achieve. Of course land for multiple properties would be worth more but the current owner can't claim that if it keeps getting rejected so hopefully will negotiate.

The owner would be far better advised to develop the outbuildings and the house as dwellings. The planners don’t want 5 or 6 houses but the owner hadn’t been remotely imaginative. Smaller scale development might get planning and the vendor should engage a planning specialist. I would be surprised if they would sell without looking at a smaller scale development if it’s in the development plan. The vendor hasn’t got to the end of the road yet!!