Selling a Garden Plot or Part of Your Garden
Selling off part of your garden can put a useful lump of cash in your pocket without you having to move house at all. Around Nottingham and the East Midlands, plenty of homes sit on plots big enough that a builder could fit another house alongside, and if that describes yours, it is worth finding out what the land is really worth. Here is how I look at garden plots, and the practical things you will need to sort out along the way.
When a garden is big enough to interest a builder
Not every large garden makes a plot. The three things a builder looks at first are access, services, and size. Access means a realistic way to reach the plot for building and for the future home, whether that is an existing driveway, a shared access, or frontage onto a road. Services means water, drainage, electricity and so on being close enough to connect without huge cost. Size means enough usable ground, once you allow for gaps to boundaries and to your own house, to actually fit a home with a bit of garden of its own. As a rough guide, a plot that could take a modest house with parking and a small garden is the sort of thing that gets a builder interested, but a long thin strip with no independent access rarely works. If you are not sure, send me the details and I will tell you honestly whether it stacks up.
The process, step by step
Selling part of your garden means creating a new, separate legal title for the plot, which your solicitor handles by splitting it off from your existing title. Alongside that, there is planning: either you obtain permission first, or you sell the plot to a buyer who takes on the planning themselves. And if your house is mortgaged, and most are, you will need your lender's consent to release the plot from their charge, because the garden forms part of the security for your loan. None of this is unusual, and it happens all the time, but it does mean a garden plot sale has a few more moving parts than selling a house. I am comfortable with all of it and can guide you through the order things need to happen in.
What a plot is realistically worth, and why
I value a garden plot the same way I value any development land, using the residual method. I start from what the finished house would sell for, then take away everything it costs to build and sell it, and the profit a builder needs, and what remains is what the plot can bear. Single plots carry a quirk worth knowing: building one house does not enjoy the economies of scale that a larger site does, so the build cost per home tends to be higher, and that pulls the land figure down a little compared with what you might expect from headline house prices. It is not me being mean with the number, it is simply how the maths works on a one-off build. As always, I will show you the workings so you can see how I got there.
The tax point, in general terms
There can be a tax angle when you sell part of your garden, and it is genuinely worth getting proper advice on. In broad terms, the relief that applies to your main home can, in many cases, also cover the sale of part of its garden or grounds, within limits, which can reduce or remove a tax bill. But whether it applies, and how much of the plot it covers, depends on your own situation, so I will not put a figure or a threshold on it here. Speak to your accountant before you commit, so you know where you stand and can factor any tax into your decision. It is one of those things that is much better sorted out up front than discovered afterwards.
Common questions
Yes, but you will need your mortgage lender's consent first. The garden is part of the security for your loan, so before any part of it can be sold off and given a separate title, the lender has to agree to release that strip from the charge. Lenders do this fairly often, though they may want a portion of the sale money paid against your balance, or they may simply want to be satisfied that the remaining house is still worth comfortably more than the mortgage. It is worth speaking to your lender early, because their answer shapes what is possible. I am used to deals that involve a lender release and can work around the timing.
Not necessarily. You can sell to a builder or land buyer before permission is in place, exactly as with any other plot, and let the buyer take on the planning risk. You can also apply yourself first, which can lift the value if it succeeds but costs money and time and can be refused. Which makes sense depends on your appetite for risk and how strong the planning case is. If your plot has good access and sits among existing houses, its prospects are usually better than an isolated site, but nothing is guaranteed until a decision is made. I am happy to give you an honest view before you spend anything.
It can, and it is worth thinking about before you commit. A smaller garden can reduce what your house is worth, and having a new home built right beside you changes the outlook and the privacy you enjoy. For some owners that trade is well worth it for the cash released, especially where the garden is larger than they need. For others the loss of space and setting is too much. There is no single right answer. I would always rather you weigh the money against how you actually live in the property, and I will give you a straight figure so you can make that call properly.
Possibly, and this is one to check with your accountant rather than take from a website. In many cases the relief that covers your main home can also cover the sale of part of its garden or grounds, within certain limits, which can mean little or no tax to pay. But those limits and the way the relief applies depend on your own circumstances, the size of the plot, and how the garden has been used, so I will not quote you a figure here. Get proper advice from an accountant before you sell, and factor any tax into your decision.
Thinking about a bigger piece of land, or land with no consent in place? Read my guide to selling land without planning permission, or go back to the home page to see how I value land.
Find out what your plot is worth
Call me, Ryan, on 01158 716 385 or use the form on the home page. No fees, no obligation, and I will show you the workings.