Buyers beware the risks of future development nearby
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.