Mortgage land query?

[snico]

Wondering if anyone here has any knowledge about this,

Me and the missus are considering having an extension built, we are looking at some ways to release funds available to us.

We bought some land adjacent to our house a few years ago and bought it from the local council, paid in full and we have the deeds for the land

Is it possible to remortgage this land and release some funds, just curious really


Steve

 

[megawatt]

If you bought it off the council there may besome restrictions but, in general, you should be able to use it as security for a loan.

MW

 

[snico]

There are no restrictions on it, it was bought a good few years ago and I hold the deeds, I checked for any restrictions also.

I dont even know what the land would be worth now, It was bought about 9/10 years back for £3000. It is not a massive plot, enough to build maybe 2 average sized houses on

 

[megawatt]

Normal equity rules apply ... You'll need a market valuation and then a lender will lend a % of it's value with a charge on the deeds.

MW

 

[heatingman]

most important thing is the location of land and can it be used for development.
If you are just trying to use the land as security against a loan to extend your present house, dont expect a lot. If you can get the land approved for development it obviously increases in worth, depending on location.
The funds are still available, even in the present climate.

 

[^woody^]

You can only remortgage the land if you had a mortgage on it in the first place, and then its questionable who would want to lend or release funds on a strip of land of questionable value to the open market if you defaulted.

Land only gets value if you have permissions to do something with it. Otherwise its worthless to anyone else.

 

[megawatt]

You can only remortgage the land if you had a mortgage on it in the first place

This is a little pedantic Woody ... Let's say take out a loan using the land as security if it meets with your OCD mind

And then its questionable who would want to lend or release funds on a strip of land of questionable value to the open market if you defaulted.

Once it's been valued it wouldn't be questionable value it would be market value.

Land only gets value if you have permissions to do something with it. Otherwise its worthless to anyone else.

Don't be silly ... Land has an inherent market value only the amount of this value changes due to location and planning permission etc.

MW

 

[snico]

The land could be used for development.....unlikely, but its location would make this possible

I'll look into it in more detail this week

 

[^woody^]

No .... land has no inherent value unless it has a use, or can be put to a defined use. It is not a product.

This land may have value to mr snico, but no value to the guy across the road. And no value to a lender - even if 'valued'

What if a semi can be built on it and it is valued as such, but then access is via mr snicos back garden? Then it has no inherent value to anyone else

And the OP asked about remortgaging, which is quite specific and different to taking out a separate loan and will attract different answers

 

[megawatt]

No .... land has no inherent value unless it has a use, or can be put to a defined use. It is not a product.

Woody ... You are talking total nonsense.

If you can find any amount of land in London (with or without permission to do anything with) without an inherent (and large) value ... Please post back and let us all know

MW

 

[snico]

I'm siding with MW on this one.....but i'f i'm honest I dont really know the ins and outs of it.

So I will let you both carry on

 

[^woody^]

It may be that land, in London is desirable for several possible reasons so people may want to snap up land that has little use, but still attracts a certain price. But remember that price has no relation to value at all

But it will not be the same for another town and therefore you can't say that all land has value just because all land in London may sell.

Lets say I want to sell 1m2 in the top corner of my garden? Who will want to buy it? what is its "inherent" value? What about the whole of my back garden? A fair size but no access at all, who wants to buy it - its desirable to my neighbour, but no-one else. It is not inherently valuable.

Now suppose I want to sell the whole of my plot, much more useful, and much more valuable, but still not inherently valuable.

 

[snico]

Dont people buy plots on the moon?

 

[snico]

Dont people buy plots on the moon?

 

[empip]

Ballpark values... Look at small plots.
NB. Residential building land.

...Valuation Office Agency (VOA) is an executive agency of HM Revenue & Customs (HMRC) with 85 offices spread throughout England, Wales and Scotland employing around 4,300 people...
http://www.voa.gov.uk/publications/property_market_report/pmr-jul-07/residential.htm

Convert your measurements :-
http://www.cleavebooks.co.uk/scol/ccarea.htm

1 Hectare = 10000 square metres
Very close to :-
2.47 acres.
11959.9 square yards.
107639 square feet.

http://www.lawsonfairbank.co.uk/planning-permission.asp

Planning Consent and Cost
Land with planning consent is more expensive. This is because the vendor has taken the time and expense to turn their piece of land into profit. Unlike land without planning permission you have a written guarantee of planning permission as long as the work is started within the remaining timeframe - a maximum of five years from the date of issue....