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Last edited 05 Nov 2020
Land value is the amount of money that a piece of land, along with the property contained on it, is priced at. This includes any improvements that have been made to the land. Land values increase when demand exceeds the supply, or if the land has intrinsic value greater than neighbouring areas, for example, if it has an oil supply or fresh water.
The ideal developable piece of land is of an adequate size to maximise its potential. For example, think about a site that is too big for two houses, but not big enough for three. Simply building bigger houses might not solve this problem as the size of a dwelling is not the only characteristic affecting its price (for example, in some areas the market expects houses of a particular size).
The ideal site for a specific project will be of a certain proportion. For example, a 1,000 sq. m site at 50 m x 20 m is likely to be a well-proportioned site. However, a 1,000 sq. m that is 200 m x 5 m may not be very suitable for development.
As with size, depending on the nature of a project, the proportion of the site that fronts a road is important when assessing its value. In the worst case, where a site is land locked and has no direct access to a public highway, the purchaser will need to buy a second piece of land in order to create access.
As with proportion, shape is one of the most influential factors on value, especially in smaller sites. Consider for example, a one acre square compared to a one acre triangle. The amount of wasted space due to the sites shape pushes down the overall value of the land.
 Development potential
It is generally not feasible to build a 20-storey apartment block in a country village or a warehouse in a city centre. Development potential is defined by the permissions that can gained and what can be marketed in a particular area.
 Time constraints
What time pressures is the project under? The vendor can ultimately define the price based on whether or not they require a quick sale. It is important when carrying out this sort of time-based assessment to take into account costs of interest repayments on any loans.
There are a number of ways that a quick assessment of land value can be made:
- Research what other sites of similar type and location are selling for (e.g. Zoopla, area stats for UK)
- Advertise the site, asking for offers.
- Many commercial estate agents will offer a free initial review of land.
- Seek advice, from a professional such as a surveyor.
This article was created by --Grant Erskine Architects 11:10, 14 January 2013 (UTC)
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