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”.
[edit] Related articles on Designing Buildings Wiki
- Avoiding planning permission pitfalls.
- Development appraisal.
- 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.
- Permitted development.
- Planning permission.
- Rating valuation.
- Residual valuation.
- Speculative construction.
- Use class designation for land and buildings.
- What is a housing start?
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