A large garden can be a blessing if you have green fingers but a curse if you can no longer look after it.

This was the case for Agnelo Fernandes, who lives with his nephew in a four-bedroom house in Arnos Grove, north London.

The retired bank worker’s garden measured 270sqm – larger than a tennis court – and, due to ill health, it was becoming too much for Agnelo to maintain. But he was reluctant to downsize and leave his home of 47 years.

So Agnelo, 68, was thrilled when a letter came through his door from property developer Caswell & Dainow offering to buy part of his land – and after a chat on the phone, a site visit was arranged.

A week later he received a formal offer for the land – £150,000 in exchange for 200sqm. Agnelo, who had been struggling to keep up with his mortgage repayments, which have nearly doubled to £1,000 a month in recent years, says it seemed like a perfect opportunity to pay off the remaining £147,000 on the mortgage.

He adds: ‘Since I retired due to ill health, my disposable income has been very much reduced. My mortgage payments were like a stone round my neck.

‘My fixed-rate mortgage came to an end and, after the Liz Truss Budget in 2022, interest rates sky-rocketed, meaning my mortgage rate increased.’

Agnelo says he used the money he received to pay off his mortgage entirely and feels more financially secure as a result. A new three-bedroom detached house is being built on the plot, and Caswell & Dainow says it expects the property to sell for between £750,000 and £800,000.

Agnelo says: ‘I didn’t really get involved too much in the design of the house being built, but I was consulted throughout.’

Lewisham couple Ahmet Ziya and his wife had long wanted to build a house at the end of their 330sqm garden, but had been refused planning permission twice by his south-east London council planning department.

Ahmet, who is 68 and retired, lives in a four-bedroom, semi-detached home on a corner plot in the borough.

He always felt there was an opportunity to develop the land at the rear of the garden, which contained only a few conifer trees and a garden shed.

His previous attempts in 2016 and 2017 to get planning permission to build a house on the land were thwarted by the council ‘because the design did not complement the street’.

Naturally, his interest was piqued when he received a letter asking if he wanted to sell part of his garden so a new property could be built.

Ahmet agreed to sell 175sqm of the garden to Caswell & Dainow, which took on the planning applications, architect and survey costs.

Once planning permission for the development had been secured, in September 2024 he received a ‘high five-figure sum’ for the slice of garden sold.

He says: ‘We weren’t making use of the rear of our garden, and we have used the money to try to enjoy our retirement. We also want to help our son get on the property ladder.

‘Our only concern was to ensure the new building did not overlook our home or our neighbours’ properties because we wanted to be considerate.’

A three-bedroom bungalow has now been built in the space, which is being sold by the developer for £750,000.

So why are more people selling parts of their garden to developers?

As we have seen, selling a slice of unused garden can give homeowners an easy windfall.

Many use the proceeds to fund retirement, pay off mortgages and help loved ones get on the property ladder, according to Caswell & Dainow, an east London-based company, which uses aerial photography and ‘in-depth’ planning knowledge to target sites across the capital.

The business has worked on about 50 projects, predominantly in London and the Home Counties.

It has paid homeowners up to £500,000 for a slice of their garden, including an 800sqm site in Greenwich, south-east London, which had potential for a new six-bedroom house.

Typically, however, households receive between £100,000 and £150,000 for a plot. Other developers that buy slices of garden include Clarendon Homes, Marches Homes and Muller Property Group.

The minimum size a plot needs to be is about 100sqm, although there are exceptions in very high-value areas.

Caswell & Dainow says it has identified about 9,000 suitable properties in London alone. Key areas it focuses on include Brent and Waltham Forest, Newham, Barnet, Tower Hamlets and Haringey.

But the firm warns that prime locations in central London, such as Kensington & Chelsea, Westminster, Camden and Islington, were often harder to crack because of tough planning rules and high property prices.

Adam Dainow, co-founder of the firm, says: ‘With housing demand continuing to outstrip supply, Britain’s gardens could represent one of the country’s most overlooked opportunities – delivering both financial freedom for homeowners and new homes where they are needed most.’

The developer focuses on sites in residential areas and properties on larger-than-average plots, where there is potential for separate access, as well as close proximity to transport links and amenities.

Co-founder Charlie Caswell doesn’t believe such schemes lead to overdevelopment in residential areas. 

He said: ‘Well designed small-scale development is very different from overdevelopment. These schemes typically involve just one or two homes and are carefully designed to sit within the grain of existing neighbourhoods.

‘They make use of land that is already enclosed and often under-utilised, rather than expanding into open countryside.’

So when is it a bad idea to sell part of your garden?

Think carefully if you are approached by a business offering this – there are serious legal and financial implications to consider, particularly if you get a phone call or letter out of the blue.

Amy Leivers, deputy managing director of property at WSP Solicitors, says: ‘Speak to a property solicitor and explain what you are hoping to do.

‘They will check the title deeds and comment on any restrictions or obligations that might exist on the legal title. A review of the boundaries is also useful to confirm exactly what land is owned.’

Firstly, homeowners should be wary of the price they are quoted for the land by a developer.

Manjinder Atwal, a director of housing and property litigation at Duncan Lewis Solicitors, says: ‘Selling off part of your garden to a developer may look like an easy way to make money, but homeowners should proceed with real caution. The developer will be looking to secure the land at the lowest possible price.

‘One of the biggest risks is undervaluing the land. A strip of garden might seem modest, but if it has development potential – particularly if planning permission could be obtained – it could be worth far more than the initial offer.’

Offers made quickly, without a clear basis or proper consideration of planning potential, should be treated with caution. Developers will price-in their likely profit, so homeowners should ensure they are not missing out.

A chartered surveyor can also do an independent valuation of your plot to make sure you know where you stand. Jeremy Leaf, a north London estate agent, says: ‘If you are considering selling some of your garden, you must get a before and after valuation from a chartered surveyor with appropriate knowledge and experience. 

'The cost of this valuation typically ranges from several hundred pounds to several thousand, depending on the size of the project.’ Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors, adds: ‘The impact the sale of some of the land will have on the value of your property is also crucial.

‘If you make £50,000 from the sale but the subsequent development of it takes £100,000 off the value of your property, then you may wish to reconsider.’

Before going ahead, you should also consider the valuable rights you may be giving up beyond the land itself.

For example, by selling the land you may lose rights of access, service connections such as drainage, sewers or water pipes, or future development rights over your remaining property.

There’s a chance it could also affect your privacy, security and the value of your home.

There is also the question of ‘overage’ or ‘clawback’ clauses, which ensure that if planning permission is later secured and the land increases in value, the original owner shares in that gain.

Without these in place, homeowners may miss out on significant future value.

Atwal says: ‘Importantly, not all land is suitable for development, and even where it is, planning permission is not guaranteed.

‘Homeowners should be cautious about entering into complex option agreements or conditional contracts without fully understanding the implications.

‘These transactions can be legally complex and one-sided if not properly negotiated. Developers will usually have professional advice behind them, so it is essential homeowners seek their own independent legal advice.

‘While selling part of your garden can be beneficial in the right circumstances, it is not a decision to take lightly.

‘Taking the proper advice at the outset can make the difference between a fair deal and a costly mistake.’

There is also a risk you could be landed with a tax bill.

If you sell part of your garden, you could face paying Capital Gains Tax (CGT) on the disposal value, depending on the extent of the land and purpose of the sale.

CGT is a levy on the gains you make on an asset.

For residential property, the tax is paid at a rate of 18 per cent for basic rate taxpayers and 24 per cent for higher or additional rate taxpayers. These rates apply to any gain above the annual CGT exemption, which is currently £3,000.

But if the property is your main home and complies with several other conditions, you will be eligible for private residence relief. This means that, in most cases, no tax is payable.

Nicole Zalys, of The London Accountant, says the tax relief should apply automatically where the total garden and grounds, including the footprint of the house itself, does not exceed 5,000sqm.

She explains: ‘Where the grounds exceed this, a large area can still qualify, but only if it can be demonstrated that the additional land was genuinely required for the reasonable enjoyment of the property, having regard to its size and character.’