A large garden can be both a blessing and a burden. You might enjoy the space, but maintenance might take up time or cost money. You may feel that there is a security risk.
An option might be to sell a portion of it to a neighbour or a developer - to unlock extra space for your neighbour, generate income for a local business, or reduce your maintenance time and costs. Certainly, it is something that many homeowners consider.
If you are considering selling, this article tells you what you need to know.
The selling process step by step
Assess the development potential and potential use
At an early stage, you need to consider whether to sell part of your garden is really viable. You should ask yourself who the new owner might be, and why they might want to buy.
There will be basic requirements for particular use cases. Is the plot large enough for the purpose and does it have the right dimensions? Is light important, and if so, does it come from a particular direction? Is the land really suitable for a building plot or to be gardened or farmed? Can people and animals reach it, and is there proximity to electricity, gas, water, sewerage and other services?
Next, check for restrictive covenants. These are restrictions or conditions on land attached to a property, limiting what an owner can do with the land. They will be given on the deeds to the house. You might ask a solicitor to check for you.
If your property is located within a conservation area, there may be additional regulations you need to follow. A buyer may also need approval from the local authority, who will consider factors related to a particular use such as the impact on the area's character and appearance.
Valuing your garden land for sale
The old adage that something is worth what someone is willing to pay is true here. However, it is useful to know what someone might pay for different uses.
A widely used approach to valuing land is the comparable method. This involves examining recent sales of similar plots in the local area and adjusting for differences, such as size and development potential.
The marriage value method calculates the increase in a property's value following the acquisition of additional land, such as part of a neighbour's garden. This method can help determine a fair price for both parties.
The size and location of your garden will significantly impact its value. Larger plots in desirable locations generally command higher prices.
Land with potential for development, such as building a new dwelling, will usually be worth more than land solely used for gardening or leisure purposes.
Good access to roads and local infrastructure can increase the value of your land. Plots with poor access or infrastructure may be less desirable to potential buyers.
Obtain consent from your mortgage lender and implications
If you have a mortgage on your house, you must obtain consent from your lender before selling part of your garden. Without their permission, you won't be able to sell.
Mortgage lenders may object to your proposal if they believe the sale will decrease the value of your property or increase the risk of their loan. They may ask you to provide evidence, such as a formal valuation, that demonstrates the sale won't adversely affect your property's value.
Because selling part of your garden may reduce the value of your property, a consequence of doing so may be a higher loan-to-value ratio, potentially affecting your mortgage terms or interest rates. It's crucial to discuss these implications with your lender before proceeding with the sale.
Establish boundaries and access arrangements
This is a practical step. Using a plan of your property, mark out what land you wish to sell. As well as above-ground considerations such as access to the parcel, you may need to consider below-ground factors, such as where pipes are located, either to avoid them or to give access to them.
Seek planning permission if necessary
If you intend to sell your garden land for development, obtaining planning permission in advance can increase its value and appeal to potential buyers. However, this isn't always necessary when selling part of your garden without development intentions.
If you want to obtain planning permission, the starting point is to submit an application to your LA. This should include detailed plans and supporting documents outlining the proposed development. You'll need the help of an architect or a planner
Keep in regular contact with the planning team at your LA throughout the planning process. Address any concerns or objections they may have to increase the chances of a successful application.
Be aware that planning permission may come with certain restrictions or conditions, such as limitations on the height or design of a new dwelling. Ensure that potential buyers are aware of these restrictions before finalising the sale.
Negotiate the sale with your neighbour or potential purchaser
When your target buyer is someone you'll have to get along with at a later date, engage in open and honest negotiations. Establish a fair price based on formal valuations and consider their needs and preferences when agreeing on boundaries and access arrangements.
Both you and your purchaser will have rights and obligations regarding the sold land. Ensure that both parties understand these rights and obligations before finalising the sale.
Prepare the transfer deed
A transfer of part involves selling a portion of your existing property to create a new, separate land title.
This requires preparing a transfer deed, which is a legal document that transfers the ownership of the sold land from you to the new owner. You'll need to engage a solicitor to draft this document accurately, reflecting the agreed terms of the sale and ensuring a smooth transfer process.
Once the deed is signed, your solicitor will the new title is correctly registered with the Land Registry.
In advance of preparing a transfer deed, your solicitor will need various documents, such as title deeds, covenants, and any relevant planning permissions.
In selling part of your garden, you'll incur costs, including legal fees, surveyor fees, and potential tax liabilities.
These depend very much on the complexity of the transaction - how much land you're selling, who you sell it to, and the type of land.
Bear in mind that if you sell a small plot, fees might eat into a significant proportion of your proceeds.
Tax implications of selling part of your garden
The profit on your sale may be subject to capital gains tax on any profit made. However, you may qualify for private residence relief if the land sold was part of your main home and doesn't exceed 0.5 hectares (about 1.24 acres) in total.
Selling part of your garden may also have implications for other taxes, such as Stamp Duty Land Tax (SDLT) or VAT. Your solicitor can offer advice on your obligations and help minimise your tax liabilities.