How to value my land - everything you need to know
If you own a plot of land and would like to sell it on, you might be wondering how you value land. This post will give you some useful hints when it comes to land valuation - although you may find it more beneficial to get in touch with us for a free appraisal of your land for development.
Read on to learn how land is typically valued.
Government estimates
The British government has some useful estimates for anybody wondering how to value land. These are very broad averages, considering the average price of a residential site, as well as including some subsections for industrial and agricultural land. The estimates can be found here.
Land value calculations
While there is a lot of variables that go into assessing the value of land, there is a simple equation that most valuers use.
Value of land = Price of new homes – cost of building the new homes
While this is very formulaic, the actual value of the land can be extremely subjective depending on the land itself. Here are some pointers about valuing land:
Land is valued depending on the market
Similarly to how houses are valued at completely different rates depending on where they are in the country, land is valued according to market value (as opposed to the actual land value).
This means that a plot of land in Westminster - right in Central London - will cost a lot more than a plot of land in the Somerset countryside! This is an important thing to consider when you are valuing your land, as you regrettably may not get as much money from it as you would like.
Other factors that can affect the value of land
There are quite a few other factors that can affect the value of land. These include:
Connection to services
A plot of land that has a good connection to water, gas and electricity will be looked upon much more favourably than a plot of land without these services. Valuers will consider both the cost of bringing these services to any housing built on the land and the price people will be prepared to pay for the ease of having the services pre-connected.
Developments in the area
A land valuer will likely consider all of the prospective developments in the area, to assess what may change before a house is built. For example, a new school opening nearby would increase the value of the property, but a block of flats built on neighbouring land would reduce the value of the property. A valuer will need to get a really clear idea of the council’s and neighbours’ plans for the future.
The site itself
The valuer will assess all parts of the land, including its topography. If it is on a hill, then the value may go down - properties built on the site will need extra work, and will most likely cost more.
Legalities
Sometimes, there are legal documents that mean that a certain patch of land cannot be developed on in a specific way. These can often be overturned, but it is a lengthy and costly process, which will inevitably lower the sale value of the land.
Location to nearby services
Just like buying a house, factors such as local schools, links to train lines, and accessibility to shops are all considered when purchasing a plot of land. Land with these amenities may be significantly higher than exactly the same plot of land without these amenities.
Size
The size of the land is one of the main factors that go into its valuation. Many people think that the bigger the land, the higher the price - and certainly, if the land is exactly the same in all the other factors, then this would be the case. However, as described above, there are many other factors to consider when valuing land - so much so that it may be the case that a smaller plot of land is more valuable than a larger one elsewhere.
As you can see, all of these factors consider both the value of the land itself and how much it would cost to build something on the land. Land valuation is something that should be done by an expert, but it definitely helps to have a good idea about what may increase or decrease the value of a piece of land.
Having some insider knowledge about how to value land will help you feel reassured that you are getting a good price, whether buying or selling.
Get in touch with us today for a free assessment of your land for development. We're always looking for new sites for development.