Land Valuation And How Does It Work?

As a land promoter Catesby Estates has carried out numerous land valuations over its 25 years in business.

Any new site which Catesby Estates assesses on behalf of a landowner goes through the process of having a detailed land valuation carried out.

This is specifically done by members of the land team who are experienced at assessing sites and their potential value and deciding whether the site meets the criteria needed to be part of our land promotion portfolio.

We follow the same process on every site when a land opportunity first comes into Catesby. 

If the site is able to pass through our planning and technical reviews it, then comes to the land team in order to start appraising the site to determine once and for all if the opportunity meets our financial model.

We initially work with our in-house teams to get an idea if there are certain restrictions to the number of homes which would be appropriate for the site or perhaps there is third party land in which a ransom payment would have to potentially be paid.  So therefore it is important that the appraisal we carry out is thorough and accurate.

Qualifying parameters for land promotion

Catesby’s criteria is quite specific when it comes to sites that we are appraising, this means that we generally look at sites which are 8 acres and above (although there are exceptions to this) with no real limit in place as to how large the site could be as it not uncommon for Catesby to be looking at land sites which can deliver hundreds if not thousands of new homes.

Appraising the financial returns for a land promotion site

Within the land appraisal there area number of different key factors we look at such as price per square foot, how many units could we achieve on the site, what do we think current build costs would be and will there be any infrastructure costs required for the site such as new schools or roads.

We also take into account what our planning budget would be, what the promotion upfront fee to be paid to the landowner is, as well as legal costs for the landowner which Catesby covers. 

In addition there are other parties that have costs which we need to account for such as land agents upfront fees for bringing the land opportunity to us and annual monitoring fees for carrying out on going work on the site after we have be able to secure the site through a legal agreement with the landowner.

Having gone through our valuation which will show all the costs mentioned above as well as showing a breakdown in a house mixture i.e. 2/3/4/5 bed homes, we will ultimately calculate an estimated land value.  This details what the site could be worth with planning permission if the promotion of the land was successful.

Agreeing land promotion terms

As long as all of our in-house criteria is met we are able to use our land valuation in order to prepare an offer on the site which is sent either to the landowners agent who introduced us to the land opportunity or direct to the landowner if they do not have an agent representing them. 

Our offer then goes in to further detail of how we will promote the site and the terms of the promotion agreement.

If the offer is accepted, solicitors are then appointed to draw up the legal agreement with Catesby covering the landowners solicitors costs.

Find out what your land could be worth with a no obligation appraisal of your land site.

We’re actively seeking strategic land sites to add to our land promotion portfolio.

With a proven track record and strong success rate, landowners across the country are encouraged to contact us to find out how we could help you maximise the value of your land.

Richard Waring - Land Manager 01788 726810 / richardw@catesbyestates.co.uk

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