Valuing a piece of land to sell to our neighbour

robjf · 15 Feb 2016 at 16:30

Hi,

Our neighbour is building an extension onto his house and will need to buy a very small piece of land from us. As part of the process our mortgage company needed us revalue our house which has been done.

What they haven't advised is how much the land should be priced at. The land amounts to about 1square meter, and would alter our fence boundary in the back garden. In terms of the total area of the property this is a very small area but how should we price this, I literally have no idea.

I'm just about to appoint the solicitors to carry this out for us, but what should we base the price on?

Thanks
Rob

teenwolf · 15 Feb 2016 at 16:32

50000 krusty burgers

xGBHxPegasus · 15 Feb 2016 at 16:36

I would guess its however much you want for it no?

cheesyboy · 15 Feb 2016 at 16:39

My neighbour wants to buy a small triangle of my garden - it's about 2.5 metres on the short edge, and 5 or 6 metres on the other edges. He talked about £500.

(I don't mind losing the garden space, my whole garden is about 50m x 10m and this bit is a bit of a spur off the side, but I'm not going to sell it for anything other than something pretty big, like £5k, as it would potentially enable him to build a big extension at the back of his house which would dominate over my patio area)

The price is whatever it's worth to you, or whatever he's willing to pay. You could hardball him - he can't do the extension without, after all. Or you could just ask for a couple of hundred quid.

zophiel · 15 Feb 2016 at 16:43

1/10th of the total value of your property.

LeeUK · 15 Feb 2016 at 18:37

If the neighbour is wanting it to build an extension and add value to his property, I'd be like cheesyboy, and be asking for something big like £5K. Take it or leave it no negotiation.

jellybeard999 · 15 Feb 2016 at 18:51

Hold him to ransom

If it has no bearing on your outlook, privacy etc, then ask him to make an offer, but i'd want a good few hundred at least.

If does affect privacy/outlook then i'd not sell tbh.

muon · 15 Feb 2016 at 18:58

Find land sold nearby and apply pro-rata?

A bit unfair to hold the neighbour to ransom. Just get the fair price.

jellybeard999 · 15 Feb 2016 at 19:00

muon said:
Find land sold nearby and apply pro-rata?

A bit unfair to hold the neighbour to ransom. Just get the fair price.

Depends if you want to sell or not.

I was only joking about holding him to ransom, but by the same token, I'd not sell it at the going rate if it would be detrimental to my privacy/outlook or affect the desirability of my own house.

andicole0 · 15 Feb 2016 at 19:18

At £1m per acre 1 square meter is about £250.
Andi.

muon · 15 Feb 2016 at 19:25

jellybeard999 said:
Depends if you want to sell or not.

I was only joking about holding him to ransom, but by the same token, I'd not sell it at the going rate if it would be detrimental to my privacy/outlook or affect the desirability of my own house.

The OP sounds like they are willing to sell the land for a satisfactory price.

Obviously if there is a specific non-monetary attachment as you mention to that land then that would be a different matter in which case tell the neigbour you won't sell the land.

Even playing hardball isn't an issue if you don't care about your relationship with your neighbour. That would be anyone's right to do as owner of the land but just seems spiteful.

lsg1r · 15 Feb 2016 at 19:35

look at prices of local building plots, work out price per square metre from that.

Then add some extra on for 'loss in value' of your propery etc.

Personally I wouldn't be letting it go for under 5-10k but that's just me... if the neightbour has an issue with the price then they should have designed their extension within their boundaries

.

Participant · 15 Feb 2016 at 19:42

robjf said:
what should we base the price on?

How big is your garden?
Where in relation to your dwelling is the proposed extension going to be?
To what extent will the extension impact on your enjoyment of the property?
Is only £500 or whatever really worth your time and effort to go through the paperwork and mortgage liaisons to sell the land?
Do you feel you need to be implicitly compensated for any disruption to access or noise disturbance from the extension works?
Have you seen plans for the extension?

The actual value of the m^2 is irrelevant in the context of the above.

muon · 15 Feb 2016 at 19:45

Participant said:
How big is your garden?
[*]Where in relation to your dwelling is the proposed extension going to be?
[*]To what extent will the extension impact on your enjoyment of the property?

Is only £500 or whatever really worth your time and effort to go through the paperwork and mortgage liaisons to sell the land?
[*]Do you feel you need to be implicitly compensated for any disruption to access or noise disturbance from the extension works?
[*]Have you seen plans for the extension?

The actual value of the m^2 is irrelevant in the context of the above.

That is going to happen either way and should happen whether land is being sold or not. The land perhaps gives you a bit of leverage.

Mysterae_ · 15 Feb 2016 at 19:46

Also add in any fees you've had to pay during the process, if any.

Participant · 15 Feb 2016 at 19:46

muon said:
That is going to happen either way and should happen whether land is being sold or not. The land perhaps gives you a bit of leverage.

Yes, but it needs to happen before he agrees to sell :confused:

.

muon · 15 Feb 2016 at 19:48

Participant said:
Yes, but it needs to happen before he agrees to sell .

What does it have to do with valuing the land?

Surely it is worse to have compensation implicit in the selling of land as taxes will apply.

edit:

Okay it will probably fall into an exempt amount anyway, but the general point stands. Why make it implicit in the land price.

kaktus · 15 Feb 2016 at 19:49

the accurate way to price the land is like this (as an example):

Total Land Area: 1000 square feet
Footprint: 50% (500 square feet built on, 500 square feet left as grass)
Floor to Area Ratio: 1.0
Maximum Buildable Area: 1000 square feet (500 square foot per floor)
Construction cost per square foot: £150
Total Construction Cost: £150,000
Sale Price of House: £300,000
Developer Profit: 15% (£45,000)
Land Value: £105,000

Take that £105,000 and divide it by the area and you have the estimated price per square foot. Multiply it by what you're selling and you have the price you should theoretically be asking for it.

Replace all the numbers you want as it relates to your property

bear in mind you're selling an unbuildable portion so you should in theory apply a discount or price it as agricultural land

Participant · 15 Feb 2016 at 19:58

muon said:
What does it have to do with valuing the land?

Because if the extension is 200 sq.m and three metres from his balcony, obstructing an extensive view of the countryside, I would price my land far higher than if it was 300m away from my garage blocking a view of the local recycling plant.

muon · 15 Feb 2016 at 20:03

Participant said:
Because if the extension is 200 sq.m and three metres from his balcony, obstructing an extensive view of the countryside, I would price my land far higher than if it was 300m away from my garage blocking a view of the local recycling plant.

But what has the marginal 1m^2 got to do with anything unless it is suddenly that 1m^2 that makes all the difference?

Why give up the money from that bit of land if it will make no difference to you other than the fair value of that land.

They would also require planning permission anyway which you can object to (probably even after selling them the land).