£50,000 for land you’re not even allowed to use - madness or shrewd investment?

Surrounded by a group of flats in Chelsea, this plot of land has absolutely no development potential – but that hasn’t stopped one wealthy buyer from reaching into their pockets

A buyer, with apparently more money than sense, has paid more than £50,000 - double the asking price - for a piece of land where they aren’t even allowed to have a barbeque.

Less than half an acre and in front of a group of flats in Chelsea, the plot sold at auction this week for £53,000 to a private buyer, according to Estates Gazette.  The buyer is not thought to be a local resident. 

The rights of the surrounding flats mean that there is no development potential for the land and the owner can’t even hold an al-fresco party in case it disturbs the neighbours.

Many will wonder if the buyer simply has too much money to splash on useless assets, but according to real estate agency Savills, such a sale is not unusual.

“We find we have a huge interest in plots of land in central London as they are so rare,” said Robin Howeson, from the Savills auction team.

In fact, in a neighbourhood where properties sell for an average £1.18 million, it was somewhat of a bargain. 

“I suspect this was bought by a speculative investor who wanted to purchase their own little piece of Chelsea and recognised the value of the lot - it is not often that you can get this for £50,000,” he added.

“City environments can easily change and so it is likely this was a very long term investment bought with grandchildren and inheritance in mind.”

The sale took place at Allsop’s residential auction earlier this week.

“Anything - property or land - is worth what someone is prepared to pay for it so why it might be baffling that this plot of grass has fetched such a price, it's obviously worth it to someone,” said Nicholas Ayre, managing director of homebuying agency Home Fusion.

Still, we can’t help but wonder what would possess someone to spend £50,000 on land they can’t even really use, let alone live on.

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Yahoo Finance UK
Fri, Apr 5, 2013 16:00 BST