Whether a residential skyscraper or a commercial building, all the development projects begin with land. With this, landowners must learn about its value to present the fair market value for the transactions. A buyer can save themselves from not paying any extra amount, a seller can become aware of every penny to pay. The question to emphasise is how much is the worth of the land.
For a clearer picture, this blog will focus on different, related aspects of calculating the value of the land.
Different Approaches of Calculation of the Land
When the need is to evaluate the value of the land, there are different approaches that you can put into use.
Comparable Valuation:
The process involves comparison with the other sites sold recently. For example, land worth 2 acres sells for 2 million pounds. If you have 4 acres of land, you can expect the value to be 4 million pounds. Though it may seem to be an easy method, before drawing any bottom line, you need to look here:
There are complications associated with this project, including:
- Land transactions are not daily events.
- The sale terms can differ from site to site.
- The values of home can change fastly, even at a short distance.
- The variation in the features can vary, leading to a fluctuation in the project.
Site-Specific Calculations:
This approach revolves around evaluating the particular calculations of the site value. To get a clearer picture of the concept, you need to take a look at what the calculations can look like:
- Find the possible cost of the completed development.
- Evaluate the profit of the developers.
- Perform calculations on the costs of building development.
- Take a look at the remaining amount that is left.
The Cost of Architectural Land per Acre in the UK
To draw the bottom line of the estimated cost that you can expect for your property transaction, you must be wondering about the cost per acre. It can depend directly on the planning permission granted. Here is the estimated cost:
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Farmland
Arable land can cost up to £8,329 on average. High-quality land can cost £ 9,327, an average land can be £8,245, and the one with poor quality can be around £7,416.
A pasture land can have an average worth of £6383. If the land is not of good quality it can cost up to £5.342, an average one can be £6,162, and the high quality can go £7,642.
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Building land
A building land can be more than £1 million if your land is in the south, but it can be £3,00,000 per acre for the north side. This land is at a premium, for which the cost can vary on different factors such as the location and the kind of planning permission.
Selling Development Land
Every piece of land has the potential of becoming something great, and farmland is no different. Landowners can find themselves with the possibility of high costs for lands, depending on several factors. Selling land to developers can be a profitable deal, yet it can come with several intricacies on the way. Irrespective of the intentions they carry, even developers need to find a win-win deal for their transaction. Considering all the aspects, here is what you need to take care of when selling lands to developers:
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Get in Touch with an Agent
It is a surprising fact that not all people are aware of the importance of a real estate agent. The only exception to this statement is that you need to sit and observe the market for months. With an agent, you can access expert advice on the transactions and connections in the market.
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Learn About the Zone of the Land
A developer would find land that already meets the requirements more profitable. Though there are possibilities to attain the changes in the designation of land, you must learn about the zoning starting point of the land.
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Look at the Expansion
The size of the land is an essential factor for evaluating the value from the developer’s perspective. Many of them can have bigger plans needing multiple lots of land. It gives you more reasons to expand the property. You can see if the adjoining land is available or not, you also need to take care of the budget while initiating to expand the budget. It can increase the feasibility of the property and the chances of getting a bigger amount.
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Make Connections
You may not know who all can be your potential buyer, and that is why you must keep making connections regularly. Even if you have published your site already on the listing sites, you can still build your connections. It can increase the possibility of finding the right prospectus for your land.
How Much will a Developer Pay for the Land?
If you are a landowner, you must want to know about the sum you can receive from the developer. There are different factors to evaluate the value of the land, including its development process. Along with that, here are the aspects that developers can consider for evaluation of the value of your land:
- The building potential of the land is the first aspect, which can depend on different factors such as size, slope, location, and shape of the plot.
- The possible worth of the property after its completion is the second aspect.
- The expenses that can incur for erecting the property. They can include diminishing costs, labour, material, and other kinds of overhead.
- The chances of securing finances for building for the purchase of the plot. If there are, then the interest that the developer might have to pay for the land.
- The profit margin that the developer will be able to secure.
These were the tips and aspects for land deals with the developer. You will also need professionals or consultants for the right pieces of advice. At ADL, we can assist you through the processes, and you can reach us for more information or to start.
Final Thoughts
The purchase and sale of land can depend on its value. As evaluation is necessary for both the landowner and the developer, this blog has focused on the ways to learn how much is the worth of the land. It has also emphasised the present value of the land and how to sell it to a developer. In addition to that, the sum you can get from the developer can depend on different factors. They are the building potential of the land, possibilities of completion, expenses that can incur, and the profit margin you can get. At ADL, we strive to assist you in the process of land development, for which you can count on our expertise. You can reach us to proceed or to learn more.
