How much is my garden land worth?
If you have a large garden and are wondering "how much is my garden actually worth?", it's important to get an accurate valuation. In this article, we look at the factors you need to consider and explain the two ways a land valuation is usually done. We will also touch upon the implications for homeowners and mortgages where a plot is next to an adjoining property.
Land valuation by region
When buying or selling land, there are various crucial factors that will determine the market value:
Condition of the land
The size of the garden land
The value of any buildings on the land
Whether the land would facilitate car parking
The abundance or scarcity of land for sale in the locality
Other local competitive factors
Whether it could get planning permission
Owner-occupiers with a mortgage outstanding who wish to sell land that surrounds their property must obtain consent from their lender. The lender will usually require a partial repayment of the original amount borrowed before they release the plot.
How to value my land
There are two methods for valuing garden land:
The Existing Use Value – The price that land can be sold at assuming it will only be used for its existing purpose. For example, garden land would be valued as if it were to be sold as an extension to someone else's garden.
The Alternative Use Value – The value of the garden land with planning permission. The easiest way to calculate this value is by comparing it to similar plots of land with planning permission. Adjustments will be made for factors like scarcity, location and plot size.
If your garden is located next to another garden, you may find that the value of the two gardens combined is greater than if the two gardens were to be sold separately. Combining the two gardens together may enable a developer to build more properties on the land, as it becomes a larger plot of land with fewer physical constraints to consider. For example, you’d only need one entrance, which saves on land usage and allows further units to be built.
Though the concept of calculating marriage value is not complicated, it often turns out to be less straightforward in practice. It can be hard to find the necessary reliable evidence of sales. House conveyancing data is well reported, but land sale treaties tend to be treated with greater privacy.
In many cases, deals are made between two individuals without advertising the land for sale. This means the sums often reflect what the buyer can afford, rather than the true market value.
When valuing a plot of land, one should take into account whether the plot might be of interest to another party. For example, a green field that is surrounded by other green fields wouldn't be of interest to land developers due to it being inaccessible with no chance of acquiring planning permission. On the other hand, a garden located in an urban environment that is situated next to other gardens or land suitable for development could be quite valuable, as planning permission is easier to acquire due to the fact that it's situated in an urban environment and can be accessed via the public highway.
Furthermore, the specifics of the sale and available negotiating time might impact the amount agreed. Executors trying to liquidate assets will probably have different priorities to the owners of adjacent land, for instance. These people might have no plans to sell and would probably prefer to avoid the associated bother.
The dynamics of any given situation, along with the urgency of the sale and the preferred timescale of buyers and sellers may not always be a good match. As such, the seller may be willing to consider offers.
If you are thinking of selling land with planning permission, particularly where a change of intended use is involved, the selling price could be affected. For instance, changing arable or agricultural land into garden land could help avoid VAT and perhaps push the value higher.
Restrictive covenants on selling land
In order to transfer ownership, a solicitor or conveyancer must be hired. Whilst the appropriate contracts for the purchase and sale of garden land are prepared, you should take note of the relevant restrictive covenants. Terms might include seeking to avoid nuisance noise from the plot, such as the inconveniences caused by potential future construction work.
In some situations, there may be overage provisions. This means the landowner selling the plot is entitled to a payment if a buyer secures planning permission on the land once the transfer is complete and for a predetermined period afterwards.
In some areas, the seller might also want to reserve subsoil and mineral rights. They might choose to include clauses for sporting rights and even airspace, if applicable.
The factors that have an impact on the value of garden land are numerous and varied, which we've only started to touch on in this article. If you have garden land that you'd like to sell, contact us today for a free no-obligation quote.