Existing use value
The cost of a plot of land depends on factors such as; the desire of the vendor to sell, location, size, form, accessibility, proximity to infrastructure and transport links, the general state of the property market, whether it has or is likely to receive planning permission, and so on.
The term 'existing use value' (EUV) refers to what land is worth in its current form. In other words, the price land or property can be sold for on the open market with the assumption that it will only be used for the existing use for the foreseeable future.
This differs from 'hope value', which refers to what land or property is worth based on the expectation of getting permission for development. Generally, land that has planning permission for development has a higher value than land that does not.
RICS state that valuers should disregard any uses that would raise the value above that required to replace the ‘service potential’ of the property and should discount any element of hope value for alternative uses that could make it more valuable. However, valuers can take into consideration value attributable to extensions or other buildings on undeveloped land that might be constructed, or refurbishments, as long as it does not cause interruption to the current operation.
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