Valuation of a 'ransom strip' of land

[Lobster]

Bit OT but I'm sure within this group's expertise...

My parents have recently been approached by their next-door neighbour who wishes to buy a strip off the end of my parent's garden, presumably with a view to gaining rear access to their property.

My parents just *might* be interested in doing this. One of several questions raised, though, is how would you put a valuation on this bit of land? From memory, my guess is that the land would be of no particular use to anybody else; ie not large enough to build a separate property on. So I really it's a case of how badly does this guy want the land, and how much my parents would miss it versus how much they'd like the cash realised... but where on earth do you start in terms of coming up with a figure for something like this? My parents (and I) literally don't know whether 100, 1000, or 100,000 GBP would be the sort of expected value. Is it something an impartial professional can advise on? Or is it simply a case of my parents coming up with a figure they could live with, and the neighbour liking it or lumping it?

Thanks David

[A.Lee]

....

£10,000 would be a starting point I think.(plus their costs).

I had similar 10 or so years ago, bloke at the back of me has no garden to speak of, offered to buy some of my large garden, an approx 6m x 10m pocket - this would more than double the size of his garden. I said £3000 plus costs. He laughed, and said the whole length, not just a corner - approx 35m x

10 m, for £1000 inc. costs. I laughed back at him.

Last year he came round, offered again to buy the land, as he couldnt sell his house as the garden was too small. I said £20,000 - the value the extra land would add to his house value according to a Surveyor friend. He thought I was joking, and offered £3000 inc.costs. I politely refused. Alan.

[robert]

The value is what they can get for it !

So how much does gaining rear access increase the value of the neighbours property -

- does it allow the neighbours site to be developed further ? - does it allow off-street parking ? - are your parents likely to move in the next few years ?

Keep in mind :

- is anyone else in a position to sell him land which would give him access ?

- would development affect your parent's properties value or their enjoyment of its amenities ?

Then decide how much of that increase in value you think they could ask for.

Maybe up to 50% ....

A professional valuer would advise - probably for a fee ! You might want to get some feel for how serious the neighbour is and how much money they are thinking of before paying for advice. You may not want to pay for advice if the neighbour is only willing to pay a couple of hundred and the value added is likely to be several thousand.

[Al]

Contact the local council and ask how much they would charge. We've got a three foot strip running across the back of our garden to prevent developers knocking a very nice plot with 3 houses and a small block of flats with lock-ups into a housing estate.

If it were me, I'd ask for the value of the proposed buyers house, and get a covenant put on it such that it must be fenced/maintained, and only used for foot traffic by the owners of the now buyers property.

But then I'm like that ;)

Al.

[Cicero]

==========================================

I've no idea of how to set a price but if you do go ahead with a sale consider applying a restrictive covenant to ensure that the land can never be used to create a nuisance such as a pig sty, dog run or even a scrap yard. A solicitor will advise, at a price.

Cic.

[andrew]

1/5 to 1/3 of the change in value of the land it allows access to but they should consult a land agent because there are many caveats.

AJH

[pete]

Someone near me tried to do this a while back. It transpired that they wanted to use this as a driveway, so they could build another house on land taken from their back garden. Without this strip, their plan was a non-starter, as there was no other way to get access - either for the owners of the new house, nor as site access for the builders. If your parents situation is similar, they may wish to consider both points: what the value is to their neighbour, and how much aggravation they may be caused by any subsequent building work.

Oh yes, and what the increased housing density would do to the value of their place. If this is the situation, then when these extra factors are taken into account, the value could be very high, indeed.

[Dave Plowman (News)]

If it's the south east of England work out the land value at approx 1/2 of the price the property might fetch and then do it as a proportion of the plot size.

[Mike Barnes]

I'd start by asking the neighbour to make an offer. Your parents shouldn't feel the least bit uncomfortable about asking roughly how much the neighbour has in mind, and should immediately reject any pressure to open the bidding themselves. They might be very pleasantly surprised or totally disillusioned by the opening offer, which would make the process easier one way or the other.

Although you asked only about price, make sure you check out that "presumably", and think of the worst that could happen.

[Doctor Drivel]

What is the value of the house inc land? As the land is approx 2/3 of the value of the house take this figure. Then measure the square footage of the land. What ever the footage is of the strip to sold that is the price you charge.

[R]

Might be worth punting this at uk.legal.moderated as well.

Has anyone suggested "Leasing" the land instead and having an income from it with the right to reverse the situation should your parents wish to sell ?

A covenant might be useful as a cover for unwanted additions to the neighbours property such as a granny annex, garage, animal shelter etc etc which might produce some problems of the "View", smells, noise etc.

[Ian White]

From experience, you could try for a deal on the basis of splitting that anticipated 20k profit between both parties. Your parents can't expect to get the whole 20k and leave him nothing; but neither can he expect to walk away with the profits of a 17k/3k split... so somewhere in between there's a deal to be made.

Your parents are in a strong position: does he want to sell that house and get on with his life, or not?

[Colin Wilson]

Good idea - ISTR a right of way might be granted if the neighbour was given a full 12 months unrestricted access, so a lease offering 364 days was the way to go, and the access being "closed" to them for the next day.

[Broadback]

As regards the value the potential buyers should get an independent valuer then they can make an offer. Or they can just make an offer which your parents can accept of decide it is not worth the hassle, plus of course the buyer will pay all costs involved.

[pete]

But he doesn't get nothing - he gets to sell his house. So aside from the costs of buying this parcel of land, everyone wins. The house seller achieves his/her goal, the land-seller makes a tidy sum and the new-house buyer ends up with a usable garden.

Round where I live the price of the land is buy far the largest component of a house price (YMMV). Much more than the cost of building the house, even though the plots are very small - tiny, in fact. I'd also venture that the sellers house *isn't* unsaleable with the existing small garden (as he/she bought it in the first place). It just doesn't command the price they want for it. I'd guess that if they dropped the price by, ooh, 20K they'd get a buyer.

[Rob]

I think it needs to be thought about the other way round - increase in value to the buyer's home. Especially if access is improved, off road parking and so on.

Rob

[RobertL]

When I was in a similar position (wanting to buy access from a neighbour in order to build a separate house on the bottom of my garden). I was told that I should expect to pay 10-30% of the increase in value of my land that resulted.

In the end it turned out to be not worth doing so I didn't take it further.

Robert

[Roger Chapman]

As usual Dribble is totally divorced from reality. The size of a garden makes some difference to the value of a property but not a great deal unless there is real potential for another building plot.

I had reason to look into the value of a ransom strip some 20 years ago and the advice then was the owner could hold out for as much as half the expected profit from the landlocked land.

I would suggest to David that the starting point (or even the sticking point) for any negotiations would be half the increased value that the neighbour can expect plus half the decrease in value that the loss of part of the garden entails. And if the increase in one is anywhere near the decrease in the other not to enter into any deal.

The Dribble logic above would imply that the seller was not actually making a profit on the transaction while the reality of such a transaction would be a very considerable profit unless the seller was depriving himself of a complete building plot by disposing of a fraction of it, in which case the seller would be onto a certain loser and a very considerable loss in the long term.

[AA]

Bearing in mind the `value` may be more than money, you have to enforce any restrictive covenant you may try to introduce to the deal, building work and subsequent higher density housing may have a negative affect on property`s current value.

Reading Festival was for many years organised by a couple who rebuffed the advances of Mr Vince Power`s Mean Fiddler organisation, Mean Fiddler run many festivals now, including a large stake in Glastonbury. One year the couple announced they would again be running Reading Festival, Mr Power also announced that he would be running that years Reading Festival. The couple argued that they had organised infrastructure, advertising and booked the bands. Mr Vince Power announced that he had taken on an exclusive lease to the farmland that allowed access to the site. Mean Fiddler still runs the Reading Festival.

The monetary value of the land may be entirely unrelated to its size.

Adam

[Doctor Drivel]

Roger, you must stop making things up. Sad but true.