Identifying the opportunity:

After acquiring a development site with full planning permission for 25 units, I spotted an opportunity to add extra value to the site. Plot 1, which was previously destined to have just one 1442 sq ft bungalow and detached garage, was a really large plot, too large for the property that was designed to go on it. I decided to apply for planning permission to split plot 1 into two plots which would each accommodate the same house type, doubling the GDV on the plot:

Image above shows the newly formed plot 1A circled in red, after splitting plot 1 in half.

Considerations:

• Would the reduced size of plot 1 significantly affect the sales price of the property?
• What implications for CILS and affordable housing contribution would there be?
• Take the risk and apply for a house or play it safe with a bungalow

The process:

I used a planning consultant to draw up the proposed plans for the new plot and apply for full planning permission. Plans were submitted in January 2021 and a decision finally made in December 2021. Using an existing house type saved on architects’ fees.

 After analysing the numbers on the deal, the value of plot 1 would not be significantly reduced in correlation with the plot size reducing. Due to the lengthy delays in the planning permission process, the decision to apply for a bungalow was made, to ensure it had a higher chance of being passed.

The permission:

Despite being no objections or queries by the planning department, the process of gaining permission took 12 months. I signed up to a Section 106 Agreement with the council to pay £9,000 affordable housing contribution and the additional development also triggered an additional £14.390 CILS payment.

Once this was agreed, development could take place.

Above: Artists impression of the newly formed plot 1A.

The numbers:

Cost of plot: £0 

Planning costs: £1,000

CILS £14,390

Aff Hous Cont £9,000

Est build cost £250,000

Est Sales price £425,000

Potential profit: £150,610

This plot is currently at first fix stage and is due to be completed in January 2023 for release onto the sales market. 

If developing houses is what you'd like to do, I can teach you how. My new course 'How to Be a Developer' is launching in January 2023 and you can find out more about it here.