How Much Is An Acre Of Land Worth?

This is one of the most common questions we get asked.

It is also a difficult question to answer, due to many factors which affect the value, such as the location within the UK, existing usage and the demand in the area for potential future development.

There will always be a difference in value between agricultural land and land that would be suitable for development, and even more so once that said land has planning permission granted. See the Farm Land Market Report by Savills.

The main difference between agricultural land and land with planning is at first glance quite obvious, land with planning permission will have been promoted through the planning system over the course of a period of time and potentially at the cost of a large sum of money.

Depending on the land and whether it has a planning designation i.e. Green Belt will determine how long that planning process might take. Currently, any land with planning permission will be located by or near to a sustainable settlement unless the size of the site happens to be large enough that the development will be providing its own facilities such as new schools, doctors surgeries and retail facilities helping to create new places and new communities.

What affects the value of an acre?

Agricultural land could be located anywhere within the UK and may or may not have some future potential for other uses. Agricultural land will currently be farmed and is graded between 1 to 5, 1 being excellent and able to provide a wide range of high yielding agricultural and horticultural crops.

At the other end of the scale is Grade 5 which is considered very poor quality, with severe limitations on crop type and yields, that restrict the use of the land to permanent pasture or grazing.

One of the main factors which will determine the price of land per acre is location and where the land sits in relation to any existing settlement whether that be a city, town or smaller village as the land could therefore have future development potential thus removing it from agricultural use.

The price will be determined by the local area and where values of properties and land sit in relation to the rest of the UK. 

An acre of land with planning permission is more valuable

The main reason there is such an uplift in value between agricultural land and land with planning permission is partly due to the housing crisis in the UK which has meant that any greenfield land adjacent to existing residential areas can command an increased price per acre.

Owners of such land also often attach "overage" clauses to the land. An overage clause means that the present landowner will still profit from any development gain through future planning permission being granted on the land, even though the present landowners no longer own the land.

As with most things supply and demand will always play a factor in land values. As the amount of land in desirable locations and non-constrained areas i.e. not in the flood zones decreases this will inadvertently increase the price of land which is suitable for development.

Every land parcel and acre of land is unique and depending on numerous factors could be valued differently. There is certainly not a one size fits all answer.

Richard Waring - Land Manager 01788726810 / richardw@catesbyestates.co.uk

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