Hope value of developments
Hope value is the term used to describe the market value of land based on the expectation of getting planning permission for development on it. This differs from the existing use value which is what the land or property is worth in its current form.
Generally, land that has planning permission for development has a higher value than land that does not. For example, a farmer may receive a valuation of their land that reflects its agricultural value. However, if the farmer were to secure planning permission to build a housing development on the land, the value could rise considerably.
Hope value is the value based on the expectation that land will get permission for development in the future, meaning that it is likely to be worth more. The hope value will rise as the prospect of planning permission becomes more likely, for example, if it is identified for development in the Local Plan, or if similar land is granted permission.
Hope value is defined by RICS as “...any element of open Market Value of a property in excess of the current use value, reflecting the prospect of some more valuable future use or development”.
In December 2024 the Labour government opened a consultation on proposed changes to compulsory purchase order (CPO) rules, including the removal of “hope value” to support affordable housing delivery. Hope value, reflecting the potential future development value of land, often increases compensation costs for landowners. The consultation closes in February 2025, for further information and to make a response visit the government website page Open consultation: Compulsory Purchase Process and Compensation Reforms.
[edit] Related articles on Designing Buildings
- Avoiding planning permission pitfalls.
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- Difference between existing use value and market value.
- Existing use value.
- How long does it take to get planning permission.
- Land acquisition.
- Land value.
- Meanwhile use.
- Off-plan property.
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