Building in your Garden
If you’re lucky enough to own a large garden, a sizeable chunk could be sectioned off to become your perfect build plot. Not only will the land be free, you could carry on living in your home for no extra expense, have easy access to a garage, shed – or even a spare room – to store materials, and be on close hand to monitor (or manage) progress.
Under the Labour government, rules were relaxed around building on garden and infill plots, resulting in a rise of multiple dwellings in small spaces that intruded on urban life. Changes in 2010 means the National Planning Policy Framework now states that domestic gardens are no longer defined as brownfield sites.
Despite the U-turn, local planning authorities (LPAs) aren’t completely against garden development, and some, even, provide guidance for self-builders. The key here is ‘appropriate’ development – an application for a single dwelling will be looked upon more favourably than for multiple houses. The LPA will want to see a robust case to justify the scale, size and position of the new property, how it will be accessed, and a design without detrimental impact to the existing house or surrounding area.
Like any self-build, there are always planning hoops to jump through, and it may be wise to appoint a planning consultant to handle your application. For starters though, here are a few points to help you see how feasible a self-build could be in your garden.
House or annexe?
If you’re planning to build a house to accommodate family members then you may have grounds to build a self-contained annexe. This is a different permission to a new dwelling and is likely to come with conditions that restrict the size of the building and state it must become part of the deeds of the existing house. Essentially, preventing the property from being sold on separately at a later date. Usually it is easier to get planning for an annexe than it is for a house.
To live – or not?
If you decide to build a new dwelling to sell on you’ll have to pay income tax on your profit as ‘a developer’ if you sell, and on the gain in the uplift in value of the garden plot now it has planning permission. Capital Gains Tax (CGT) on the profit also kicks in when you sell, whether this is straightaway or after a period of renting. However, if you move straight into your new home and sell your old house then you’ll be exempt from CGT.
This is a small piece of land belonging to someone else. This might not be immediately obvious but if you need to cross their land to access your new property or connect to the services then it could be a problem. Shared driveways might also be an issue if the agreement is to access just one dwelling or a specific house. A ransom strip prevents the development of the land and/or is a means for the owner to receive payment for access. Do your checks with the Land Registry. If there is a ransom strip in place you’ll have to pay the fee – or negotiate – in order to remove it.
A covenant attached to your home and/or the garden could be another sticking point. This is a restriction put in place by a previous owner, which the current owner must abide by. Full details are held by the Land Registry. The one to watch out for is a covenant preventing any form of garden development.
Covenants can be difficult to remove but it may be possible to pay a fee to the beneficiaries. The price is usually set according to the value of the garden as a full development plot. If there appears to be no means to trace the beneficiaries, a solicitor can arrange a premium indemnity policy. Another route is to appeal to the Lands Tribunal on the grounds the covenant is no longer relevant, although this isn’t easy to prove.
Conversely, you can add a covenant to the new plot if you are planning on selling it on.
It’s only natural that the value of your existing house will fall slightly when you carve off a section of the land. Just make sure you retain a decent-sized garden when you set-out the building plot. Remember a garden that becomes a building plot with planning permission will jump up in value, thus you’re bound to recoup your losses – and possibly more.