How to agree a fair price on a barn without planning

[flipfloplaugh]

My friends' parents have a barn they would like to sell, which we would like to buy. It hasn't got planning permission, and we all reckon it's got about 50% chance of getting planning permission. We are all friends and want to proceed fairly. How do we go about this? Let's say the barn is worth £100,000 as it is and £400,000 with planning permission. There would be costs associated with the planning application (let's say £10,000). What is the best way of proceeding? We all like each other a lot and want it to be fair, but have no idea how to work it out! (All these numbers are v pulled out of thin air, but it would be super helpful to work out what we should pay based on them!).

You can buy it now at the “without planning permission” price, with an obligation to pay an additional amount if/when planning permission is granted. It’s really quite common to do this.

This. Also they could get some agents out to value it.

Ah - I've been googling. Is this called an overage? Really useful - thank you.

😀 it is!

You could draw up an option agreement.

Why has it only got a 50% chance of getting planning permission. I thought it was pretty much permitted development these days for existing barns.

Would you still want the barn if planning permission is refused? I would have thought it was better for them to apply before selling it, then they can decide a fair price. The cheaper option would be to find a decent local building consultant and discuss what you're planning to do and they will be able to advise what will get approved. Chances are you will get permission to convert it in some way, but it depends whether your ideas fall under the remit of permitted development.

You could apply for pp before purchase.

They don't want to go through the faff of planning permission. They're older and just not interested. My friend (daughter) isn't interested either. They want to sell.

You could apply for pp, even without owning it.

I get the feeling you are not being straight with them if you are saying there is only a 50% chance of getting planning permission. You should be able to apply for pre planning advice from the planning department to get an idea of whether your ideas would be acceptable from a planning perspective.

No need for them to have any faff, or even be involved at all. Its something you can do yourselves. You don't need to own it first to do the planning application. You dont even need their permission in reality (although you do legally have to notify them).
I would crack on with that so that you can make a more considered decision on value.
As your all friends Im sure they won't suddenly up the amount they want if planning is approved - but you need to be in agreement with them about what that number will be. So lots of number crunching to get right on your end - with costing the conversion. Once you have the plans properly prepared a quantative surveyor will help with that. The smoothest way is to employ someone who will do the plans and the cost estimates at the same time.

How much land is there? Biodiversity Net Gain requirements can add hugely to development costs.

I think you need to be very careful here with all the additional costs you will incur along the way, you are taking the risk and paying them for it. Cost of construes very high at the moment and anything like bat surveys can cost £££ and hold up development costing £££. I would be trying just to pay them an agreed amount. Is the barn near their property?

I think you need to speak to a local Planning Consultant who can advise on what might get PP or if it's a complete non-starter, before you do anything else.

The owners won't be pleased if you put in a no-hope planning application which gets refused, if they want to sell it to someone else in the future. That refusal could blight any future sale.

Good advice. You should get a planning consultant involved early on to advise on the pitfalls. Actually bat surveys can only be done at certain times of the year so if you miss the season that adds delay.
If you have newts nearby that can cause problems.
I would get a thorough ground survey. We were on very unstable clay so needed to have screw piling . It added over 50k to our budget. Check flood map zones, that affects things.

Building materials have gone up a lot.

I could go on!

You can apply for permission before you buy. If the barn is over 10 years old it could well be permitted development. Get an architect out to look and ask for a price for the simplest possible outline permission. You can even ask the council to tell you if it's likely to get permission verbally, or also you can do a 'pre application' and the council will tell you if it's likely.

If you get permission for something really simple you can then apply to vary that with refinements later.

Also check out your council's 'local plan' because many councils have committed to build lots of homes, and small infill developments for 'family homes' are likely to help them fulfill this commitment (rather than big developments with objections, infrastructure needs, and the sort of homes built as cheaply as possible by developers etc).

If it is still used as an agricultural building or is part of a farm then change of use might complicate things especially if in Greenbelt or National Landscapes.

When I have looked on Rightmove, properties which have land for potential development or the property/garden is large enough to demolish and construct two or more properties, vendors have requested a 30-40% overage fee when planning permission is given.
I am not sure how they work the final price out, but someone should be able to help you with a fair figure.