Re­place­ment Plots Ex­plained

To­day over half of all self-builders are choos­ing to knock down and start again. Mark Steven­son looks at what’s in­volved — and ex­plains why it might be the right route for your project

Homebuilding & Renovating - - CONTENTS -

Could knock­ing down an ex­ist­ing prop­erty pro­vide you with the per­fect plot for your dream home? Self-build ex­pert Mark Steven­son re­veals ev­ery­thing you need to con­sider in his in-depth guide

All houses are just tem­po­rary oc­cu­pants of build­ing plots. When you think about land find­ing in that sense, all of a sud­den a world of op­por­tu­nity awaits you. Th­ese days, just over half of all self-builds in the UK take place as a re­sult of an ex­ist­ing home be­ing de­mol­ished*. While to many peo­ple buy­ing a prop­erty only to de­stroy the bricks and mor­tar feels like anath­ema, build­ing a new home by re­plac­ing an old one brings with it many un­ex­pected ben­e­fits. So how do you ap­proach the idea of re­plac­ing and re­build­ing, and how do you know whether the house you have just seen (or per­haps have even owned for years) is suit­able for the wreck­ing ball?

Iden­tI­fy­Ing po­ten­tIal

Vi­a­bil­ity is the key to iden­ti­fy­ing whether a plot has po­ten­tial for re­de­vel­op­ment — while build­ing your dream home isn’t al­ways a profit-mak­ing ex­er­cise, mak­ing sure the numbers stack up is para­mount. The idea is to work out if the project is ‘prof­itable’ and thereby ‘vi­able’, and there­fore wor­thy of your time to re­de­velop it. Un­for­tu­nately this is where many un­in­formed self-builders come un­stuck — plac­ing pas­sion be­fore pounds! My ad­vice when it comes to re­place­ment plots is to think like a de­vel­oper, do your re­search and al­ways un­der­stand the fi­nan­cial con­se­quences of taking on a project. In the broad sense, cal­cu­lat­ing vi­a­bil­ity isn’t com­pli­cated; it’s a case of work­ing back­wards from what the plot could sup­port, es­tab­lish­ing the end value and then de­duct­ing the to­tal cost of de­vel­op­ing the project and buy­ing the prop­erty in the first place. What’s left is ‘profit’, or in other words ‘eq­uity’, gen­er­ated by your ef­forts to build a re­place­ment

home. Ideally only con­sider projects that are in the black once com­pleted, un­less you’re happy to lose money. The ba­sic cal­cu­la­tion is: profit (eq­uity) = end value – build costs – pur­chase costs

While the cal­cu­la­tion looks fairly straight­for­ward, if you’re look­ing for an ac­cu­rate, re­li­able an­swer, you must do your home­work and ac­count for all costs in­volved. You’ll need to work out what kind of house the plot will sup­port, how much it will cost to build and how much it will be worth when fin­ished. The devil is in the de­tail and some of the more im­por­tant con­sid­er­a­tions are ex­plained here.

ar­chi­tec­tural de­sign and plan­ning per­mis­sion The end value of the re­built house will un­doubt­edly de­pend on its ar­chi­tec­tural de­sign, and fail­ure to se­cure plan­ning per­mis­sion will stop any project dead in its tracks. The trou­ble with de­sign is that it’s sub­jec­tive and ideally, as you are try­ing to max­imise value to make a re­place­ment project vi­able, you need to cre­ate a de­sign that de­mands the best price while se­cur­ing the green light from the lo­cal plan­ning au­thor­ity (LPa). This can feel a bit like play­ing a high-stakes game, and fail­ure to get it right could have sig­nif­i­cant con­se­quences.

all re­place­ment projects are sub­ject to scru­tiny by the LPa and plan­ning pol­icy will af­fect your de­vel­op­ment plans. The good news is that when re­plac­ing an ex­ist­ing home, the prin­ci­pal of res­i­den­tial de­vel­op­ment is al­ready es­tab­lished and there­fore de­tails such as de­sign, scale, sit­ing and ac­cess will just need to be con­sid­ered. In­creas­ing the size of the re­place­ment prop­erty will im­prove fi­nan­cial vi­a­bil­ity but will be gov­erned by strict pol­icy guide­lines. Typ­i­cally, most LPas will al­low a re­place­ment dwelling to be up to 30% larger than the ex­ist­ing house, but some will take a more prag­matic ap­proach and con­sider a wider per­spec­tive of the pro­posed de­sign and the lo­cal con­text.

Plan­ning pol­icy does favour in­no­va­tive de­sign, although lo­cal ver­nac­u­lar styles, ar­chi­tec­tural fea­tures and street scenes will all in­flu­ence what’s pos­si­ble. When de­vel­op­ing de­sign ideas, take cues from the sur­round­ing build­ings and think about how your pro­posal will im­pact or ideally ‘fit into’ the lo­cal street scene. de­signs that are over­bear­ing, taller than ad­ja­cent prop­er­ties and re­sult in loss of amenity to neigh­bours are likely to be frowned upon and prob­a­bly re­fused per­mis­sion.

When it comes to ar­chi­tec­ture and plan­ning, try not to de­sign a house that is so in­di­vid­ual only you’ll like it (as lim­ited de­mand will ad­versely af­fect value).

It may be worth check­ing your pro­pos­als with the plan­ning depart­ment by hold­ing a ‘pre-app’ meet­ing, but be cau­tious with this as the ad­vice given is not legally bind­ing on the lo­cal au­thor­ity. In my ex­pe­ri­ence, when try­ing to work out the im­pact of plan­ning pol­icy and what might be per­mis­si­ble, al­ways con­sult a plan­ning pro­fes­sional.

Deb­bie and Peter Curnow-Ford spent over a year plot hunt­ing be­fore they found a bun­ga­low on 2.6 acre site in Hamp­shire. The cou­ple gained ap­proval, via ap­peal, to knock down and build a new house de­signed by Pot­ton. The plot/bun­ga­low was £850,000 (in 2011), with a build cost (in­clud­ing de­mo­li­tion, drive and land­scap­ing) of £715,000. The house is val­ued at £2.1mil­lion, leav­ing a healthy amount of eq­uity for the cou­ple.

BE­FORE * Cus­tom and self Build Re­poRt, Home­Build­ing and Ren­o­vat­ing

BE­FORE This small, tired 1950s bun­ga­low in Kent (above), cost £300,000, with con­struc­tion costs to­talling £290,000. OB Ar­chi­tec­ture de­signed the two-storey re­place­ment (top), which is 40% larger than the orig­i­nal. The new house is val­ued at £1.1mil­lion-plus — mean­ing the self-builders en­joyed a hand­some ‘profit’.

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