Do you own a plot of land, but are not quite sure what to do with it to get the best return on your investment? Have you wondered what you could sell your land for, but felt confused about how to value it accurately? Centrick’s Land and New Homes team are experts in land and development consultancy, and in this piece, we’ll be discussing how to go about obtaining a land valuation and the variables that can affect the value of your land.
Your land is valued not merely based upon its square footage, location, or condition – it is valued based upon its potential. Centrick’s land team considers a variety of factors in order to provide you with an accurate valuation. These include:
This constitutes an analysis of the sales values that similar plots have achieved. Plots of comparable size and location can be used to estimate the relative value of your asset.
This considers the physical features of your land, both natural and manmade, which is particularly important for agricultural land, or land in green belts, but can also be a factor for brownfield sites that may require significant amounts of work to prepare for development – for example, if the piece of land has irregular elevations that need to be corrected before work can begin. A plot’s topography determines how much time and money it will cost to clear and prepare the land for its future use – this could include projects such as flattening the land, making changes to roads and paths, or dealing with manmade structures like wells or gas lines.
Your land will increase in value if developers are actively seeking to build in the area, and there is the potential for high ROI and property price growth. If jobs and opportunities are funneling into the local area, or there are significant ongoing regeneration projects, individuals and businesses looking to purchase land will likely deem your plot a good investment. For example, land values in Birmingham increased by £5 million per acre from 2013 to 2018, showing the remarkable increase in demand the region has seen over the past decade, attracting both global businesses and new residents wanting to take advantage of all the UK’s second city has to offer. Demand for development plots does not seem to be slowing down, and with the government still committed to providing 300,000 new homes each year, delivery levels will have to increase by 22 percent, keeping the appetite for land acquisition high in both greenfield and brownfield sites.
Plots with existing planning permission will likely be valued higher than those without, as there are fewer potential delays in developing the land. However it’s worth noting that often planning granted be at odds with developers plans so whilst it’s good to know that planning can be obtained, it’s not always a primary concern. Getting planning permission can be a long and expensive process, so if your site already has the correct permissions, the developer could get moving on their project quickly and efficiently, maximising their time to ROI. Any restrictions on the deed, such as an explicit inhibition for specific types of buildings or businesses being developed on the plot, can reduce the value of your land, with these restrictions impeding the potential for developers to construct their intended development. It is important that your valuer is able to navigate the complexities of land use legislation to avoid any future pitfalls in a sale and to keep you and any other parties informed.
The ease of access to your plot will certainly impact its overall value, with private access being potentially problematic, especially if a developer wishes to build residential or commercial units on your plot. Similarly, the plot’s proximity to amenities such as transport links, schools and shops, impact its value, with these amenities bringing more individuals, jobs and wealth to the region, hence the relatively lower land prices in more remote, rural areas.
The better access your plot has to gas, water and electricity, not to mention the all important broadband, the lesser the costs of implementing these services, all of which are necessities for any potential New Build development. Setting up new connections can be a long and expensive process which investors and developers will have to consider when planning their build.
With new legislation and laws comes new possibilities and restrictions regarding land use and, as a result, land value. For example, the government’s shift towards more green spaces and regulations that aim to reduce greenhouse gas emissions could impact developers’ ability to build in certain areas, potentially stifle profits, and downvalue your land. Similarly legislation can have the adverse effect and be a positive factor, legislation changes around PD or permitted development opened a significant chunk of previously unviable unused sites to a new and eager market, so make sure that your land consultants are clued in to the latest in upcoming legislation.
As we’ve seen, land valuation involves a complex series of variables that must all be considered to provide the most accurate value. Although the government offers generic land value estimates, these are based upon broad averages and do not consider the condition, connectivity and demand for land in your area. In truth, an accurate and worthwhile land valuation takes time and research, with an in-person visit to the plot being vital.
At Centrick, we don’t value your land based upon a generic formula – we offer a thorough, personalised valuation of your assets from our qualified experts. What’s more, our team have an abundance of local knowledge to ensure that our valuations are accurate. With our unrivaled repertoire of connections, we understand demand in your area better than any other agent, and can use our knowledge to ensure that you maximise the value of your asset.
Whether you’re simply curious or are seriously considering offloading your land assets, Centrick can help. To find out more about what your land is worth, contact us using the form below, or alternatively, submit your details to our Land Value Calculator for a quick estimate.
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