Buy­ers be­ware the risks of fu­ture de­vel­op­ment nearby

Yorkshire Post - Property - - PROPERTY - Paul Ad­di­son

IMAG­INE this sce­nario. Eigh­teen months ago you were cel­e­brat­ing af­ter mov­ing in to the house of your dreams. Now you’re fret­ting be­cause you’ve just been told that de­vel­op­ers have ac­quired some land at the rear of your prop­erty and have ap­plied for plan­ning per­mis­sion to put up a mini­es­tate of mixed hous­ing, which not only threat­ens your out­look but also the value of your home.

Even more in­fu­ri­at­ingly, you find that a neigh­bour has sold a strip of his gar­den to pro­vide the de­vel­oper with an ac­cess point and pock­eted enough money to en­able him to pay off his mort­gage.

Who’s to blame? Not the es­tate agent who sold you the prop­erty. There’s no way they could have been expected to know what the fu­ture held. But, more sur­pris­ingly, not your so­lic­i­tor or con­veyancer ei­ther. Their stan­dard lo­cal searches would, at best, only have flagged up any his­toric or cur­rent plan­ning ap­pli­ca­tions likely to af­fect the prop­erty and of­ten they won’t even do that.

The fact is that un­til re­cently there has been no method for house buy­ers to prop­erly in­ves­ti­gate fu­ture de­vel­op­ment risks and al­low them the op­por­tu­nity to take a con­sid­ered view about whether or not to pro­ceed with the pur­chase.

That has now changed. For the first-time house buy­ers have the op­tion to ask their so­lic­i­tor to not only carry out searches into ex­ist­ing plan­ning ap­pli­ca­tions that may af­fect a prop­erty but also to look for any threats from nearby sites that could be ex­ploited by de­vel­op­ers.

If you think it couldn’t hap­pen to you, con­sider this. Around 85 per cent of all ur­ban homes in Bri­tain fall within a 75 me­tre ra­dius of an un­ex­ploited de­vel­op­ment op­por­tu­nity – and that’s be­fore the gov­ern­ment an­nounced its in­ten­tion to re­lax tem­po­rar­ily some of the plan­ning rules.

Yet most peo­ple go into the most ex­pen­sive pur­chase they will ever make with­out check­ing what the fu­ture might hold for their prop­erty. They will prob­a­bly in­vest in a full sur­veyor’s re­port to make sure the prop­erty is struc­turally sound and they’ll trust their so­lic­i­tor’s searches to un­cover any other im­me­di­ate ob­sta­cles that may present a prob­lem. But, un­less they specif­i­cally re­quest it, they won’t be told if there is any chance of nearby de­vel­op­ment tak­ing place.

When they do, they fre­quently have cause to be grate­ful, and not just in the neg­a­tive sense. For de­vel­op­ers can also present op­por­tu­ni­ties as well as threats for home buy­ers.

Take this re­cent case as an ex­am­ple. We pro­vided a re­port to solic­i­tors act­ing for the buy­ers of a 1930s three-bed semi which re­vealed that a neigh­bour­ing prop­erty had been given per­mis­sion for eight new houses to be built. The de­vel­op­ment, if it went ahead, would have a neg­a­tive im­pact on the view from the rear of the house.

Copies of the ti­tle to the neigh­bour­ing land, con­trolled by the de­vel­oper, showed a re­stric­tive covenant that could ben­e­fit not just the so­lic­i­tor’s client but three of their neigh­bours. They could choose to ei­ther block the de­vel­op­ment or ne­go­ti­ate a re­lease with the de­vel­oper. They chose the lat­ter, and all four ended up with a five-fig­ure fi­nan­cial wind­fall. The so­lic­i­tor also gained three ad­di­tional clients.

Even water­front prop­er­ties can have po­ten­tial prob­lems. We were able to point out to one home buyer that the view from the apart­ment he was think­ing of pur­chas­ing could be some­what spoilt by a six-storey float­ing ho­tel that had been given per­mis­sion to be moored per­ma­nently on the wa­ter op­po­site.

In that case, the buyer still chose to pro­ceed. But he was able to do so with his eyes wide open. Know­ing what the fu­ture may hold can help buy­ers make prop­erly in­formed de­ci­sions.

Paul Ad­di­son is MDof DevAs­sist Ltd, which pro­vides re­ports on de­vel­op­ment risk or hid­den value. For in­for­ma­tion visit www.dev-as­sist.co.uk.

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