Guide to How is Land Valued?

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When people discuss ‘land value’ what they mean is the cost of a specific area or plot of land – and if you’ve ever had any dealings in purchasing land or real estate, you’ll appreciate that these costings can vary from location to location.

This begs the question of why this is the case and what is it that decides the value of land? Here we take a closer look to find out.

Varying Factors

Land value is calculated with various different factors in mind – many of which will either impact positively or negatively on the overall worth of an area. What’s more, these variables can change over time depending on who buys the land and what they do with it.

Here are some of the factors:

The Landscape

The attributes of the landscape can have a big bearing on how expensive it is. This covers aspects like the quality of the ground, the proximity to water and sewerage, the weather and even the topography of earth and how easy it is to build on.

The Local Development

The existing developments also have a bearing. If for example the land is placed between affluent areas the price will naturally be higher. Equally, if the surroundings aren’t as appealing the value goes down.

The Amenities

The amenities in the area can make a big difference. For instance, the quality and availability of things like the local school placements, shopping options and doctor’s surgeries can increase or lower the price of land.

The Access

In addition to this, the accessibility is another major factor. If the land is located near or within an area that has a strong access infrastructure (roads, rail links, bus routes, cycle paths) this will be more sought-after and considered more valuable than one which doesn’t.

Development Restrictions

It might be that there are development restrictions in place, such as listed buildings that can’t be moved or certain natural areas that need to be protected. If this is the case this can also bring the value of an area down as it won’t be as desirable for property developers.

Buying Advice

Naturally, not all of the above will be applicable to all areas of land, but often variations on these will be the main determining factors.

So, if you are an investor looking at buying land it can be wise to seek the advice of specialist real estate advisors. Their expertise could help you to decide whether a particular plot is priced correctly and can offer their specialist insights into the potential profits that could be made if the area was to increase in value.

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