If you already own a plot of land and would like to sell it on; you might be wondering how you value land. This guide will provide you with some useful tips when it comes to how land is typically valued. Although you may find it more beneficial to get in touch with us for a free appraisal of your land for development.
Similarly to how properties are valued at different rates depending on where they are in the country; land is valued according to market value (as opposed to the actual land value).
Put simply, this means that a plot of land in Central London, will cost a lot more than a plot of land in the southwest countryside. This is an important thing to consider when you are valuing your land.
There are multiple variables that go into assessing the value of land, but there’s a simple equation that most use.
Value of land = Price of new homes – cost of building the new homes
While the above is very formulaic, the actual value of the land can be extremely subjective depending on the land itself. Here are some important pointers and things to consider about valuing land:
There are quite a few additional factors that can affect the value of your land. These include:
Connection to services
A plot of land that has a good connection to water, gas and electricity, will be much more favourable than a plot of land without these services. Valuers will consider both the cost of bringing these services to any dwellings built on the land. Along with 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 consider all of the prospective developments in the area. This will be to assess what may change before a dwelling is built and completed. 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. An experienced valuer will have a clear idea of the council’s and neighbours’ plans for the future.
The site itself
It may seem obvious but a valuer will assess all parts of the land, including its topography. If it is located on a hill, then the value may reduce. This may be because properties built on the site will need extra work, and will most likely cost more.
Location to nearby services
Similarly to when buying property, factors such as local schools, links to public transport, and accessibility to amenities; are all considered when purchasing a plot of land. The value of land with these amenities close by can be significantly higher than exactly the same plot of land without them.
The size of the land is one of the main factors that go into its valuation. Most think that the bigger the land, the higher the price. However, as listed above, there are many other factors to consider when valuing land. So much so that a smaller plot of land may be more valuable than a larger one elsewhere.
There may be legal documents that mean a certain plot of land cannot be developed on in a specific way. Whilst these can often be overturned, it can be a lengthy and costly process.
As you can see, all of these factors consider both the value of the land itself; and how much it would cost to build upon the land. Although we’re firm believers that knowledge is invaluable; a full land valuation should be done by an expert. But having some insider knowledge about how to value land will help you feel reassured that you are getting a good price.
Get in touch with us today for a free assessment of your land for development.