How much is our plot of land worth??

[marcus1977]

Hi all...we live in an end of terrace house in Ramsgate, Kent, and applied for and got full planning permission for a 3 bedroom detached house in our garden adjacent to our property. The house and land is up for sale, but several builders are making offers on just the land. What is this land worth? We were told to work on thirds. Third for land, third for building costs, and third for profit. So, if the house was valued at £150,000, then the land was worth £50,000? Is this correct?? Thanks for any help!!

[MW234]

It depends on how 'up and coming' the area is. Look for similar plots for sale and get a rough guide as to the going rate.

[confused]

I just got my land valued and was amazed! Ask 3 local estate agents to come out and give you a value. They will vary slightly but go on an average of the 3.

[The Duke]

Thirds is a good rule of thumb to give you an estimate but speak to your local agents and then let potential buyers make their offers and the market will decide its value.

[Luke Owen]

also worth asking an auctioneer, a lot of land sells at auction

[Danny@Vision]

Or a recognised Land Broker they will tell how much land in your area is selling for,
what you ask for it and what you get are 2 different things. But like others have mentioned, speak with local estate agents who have experience in sales of land. Search Thanet councils planning permission portal to see whether anyone in the area is doing or has done the same thing recently.

[Dougie_tps]

Hi

The best way to establish a rough value for a plot of land is the residual method. This is essentially:

Land value = Gross Development Value minus (Build costs + Fees + Required Profit).

So, if the GDV is around £150,000, we could allow around £60 per sq ft for build costs, around £3,000 for fees and 25% of GDV for profit then we can work it out as:

Land Value = 150,000 - ((say £60 psf on a 1,000 sq ft house) 60,000 + 3,000 + 37,500)

Therefore Land value = £39,500.

Obviously this is just an example and there are many variables, but this is the technique a professional developer should be using and it will be how they will place a value on your development land.

[New Homes Expert]

Marcus,

Take no notice of the other replies!

The correct method is thirds!
The land is worth a third of the price the new home would fetch on the market now.
This then takes into account the location.

Builder's like me prefer 25% Estate agents and greedy vendors try for 40% and even 50%. Only a naive self-builder would pay those silly percentages.

[barryov]

Originally Posted by marcus1977

Hi all...we live in an end of terrace house in Ramsgate, Kent, and applied for and got full planning permission for a 3 bedroom detached house in our garden adjacent to our property. The house and land is up for sale, but several builders are making offers on just the land. What is this land worth? We were told to work on thirds. Third for land, third for building costs, and third for profit. So, if the house was valued at £150,000, then the land was worth £50,000? Is this correct?? Thanks for any help!!

Hi. I would say in todays climate it might be closer to 25 or even 20% of the total price of your valuation.... Sorry!

[New Homes Expert]

Some land is still priced at stupid money!