For a landowner considering the future of their land, one of the biggest questions is often how much it could be worth if it were suitable for development. There is no simple figure that can be applied to development land, with its potential value influenced by a combination of planning, market and site-specific factors.
Planning Status
Planning status can have a significant influence on land value. Land with planning permission for residential development will generally be considerably more valuable than land without consent, which is one of the reasons why successfully promoting land through the planning system can be so important.
The type of permission secured also matters. The number and type of homes that can be delivered will influence what a developer may ultimately be prepared to pay for the site.
Location
As with the wider property market, location is an important consideration. Local house prices, demand for new homes, access to employment, schools, transport connections and amenities can all influence the attractiveness of a site to developers.
Two similarly sized pieces of land can therefore have very different development values depending on where they are located.
Development Potential
The number of homes that can realistically be accommodated on a site is another key consideration. Site size alone does not determine this.
Access requirements, open space, landscaping, drainage, biodiversity, infrastructure and other planning considerations can all affect the developable area and ultimately the number of homes that can be delivered.
Site Constraints and Development Costs
Developers must consider the cost of turning land into a completed development when determining what they can afford to pay.
Abnormal ground conditions, access improvements, utility connections, drainage infrastructure and other site-specific works can increase development costs. Identifying these considerations early can therefore provide a much clearer understanding of a site’s potential value.
Planning Obligations
Residential developments may also be required to make contributions towards local infrastructure or provide affordable housing as part of the planning process. These requirements can influence the overall viability of a scheme and consequently the value of the land.
Market Demand
The residential property market also has an influence. Developers will consider expected selling prices, buyer demand, construction costs and wider economic conditions when assessing a potential site.
This means development land value is not necessarily fixed and can change as market conditions and planning circumstances evolve.
Maximising the Value of Your Land
Achieving planning permission can substantially change the value of land, but securing the right consent and then generating competition between potential purchasers can be equally important.
At Lone Star Land, the objective is not simply to secure planning permission, but to promote each site strategically and seek to maximise its value on behalf of the landowner.
If you are a landowner, or represent a landowner, and would like to explore the potential value of your land, contact Lone Star Land to arrange an initial consultation.
Sources
RICS – Valuation of development property
GOV.UK – Viability
GOV.UK – Financial Viability for Housing-Led Projects
