anyone know anything about compulsory purchase orders?

[mumonthenet]

a friend is thinking of investing in a small property in an area which will probably be completely redeveloped ...and therefore the subject of a cpo.

the property is cheap as hell!

I think she's mad to risk all her savings on this but then I don't know anything about cpos.

Any opinions?

We live next to fields that are being developed. The first proposals went in way back in 1996. Local residents have been throwing spanners in the works and getting it delayed.

Development may be years and years away so she will never be able to sell in the meantime - except at a dramatically reduced price.

If, on the other hand, she doesn't mind living in a property with that hanging over it she should eventually be able to gain a fair market price for the property, which by the sound of it could be a good return on her investment if she is getting it really cheaply to start off with.

Personally I wouldn't touch it with a bargepole!

thanks for your input forty.

I realise the question was a bit vague and I don't know the details just that it's in a deprived area with many derelict properties. Don't know how long the redevelopment plans have been going or how much opposition there is.

Maybe she could speak to the planning dept at the local council for advice? If she's really desperate for a home of her own then it might be worth going for it, but we're just entering a depression and the property will be even harder to sell. The neighbouring ones will get snapped up for cheap buy to let properties, the landlords will get tenants who can't get a council house, the rest will get boarded up... nightmare!

oh gawd what a depressing scenario.

But if a property goes for compulsory purchase how do they decide what to pay the owner?

I'm not sure exactly but it's done to a formula so should be reasonably fair. I think she might also get something extra for the loss of her home but you'd have to check that. I know if a council tenant gets moved it's currently £4400 but leaseholders get more like £30,000 - so if she was in line for anything like that it could be worthwhile. But the BIG problem is you get nothing until you are moved out and in the meantime you can't sell the house and you end up living in a hell hole.

thanks, forty for your info, I think it's a freehold she's buying (and not planning to live in it) still lives with parents and has some savings and a couple of thou inherited from an uncle.

She thinks it might be a kind of nest egg..gawd knows but will make sure she gets some good advice.