Valuation Concepts Relevant to Development Flashcards

(4 cards)

1
Q

What is hope value?

A
  • The additional value arising from the expectation that planning consent or enhanced use may be achieved in the future.
  • Often relevant when land has potential for future development but no current consent.
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2
Q

What is marriage value in a development context?

A
  • Value created when two or more interests combine to produce greater value than separately.
  • Often applied in site assembly or when adjoining parcels unlock enhanced development potential.
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3
Q

Why are ransom strips relevant to development appraisal?

A
  • A ransom strip controls access to a development site and may significantly impact land value.
  • Case law (Stokes v Cambridge, 1961) supports sharing uplift, often around one‑third of value created.
  • Must be considered in site acquisition and viability assessments.
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4
Q

What is purchaser’s cost in a residual valuation?

A
  • An allowance for SDLT, agents’ fees, and legal fees deducted from GDV when calculating net value.
  • Prevents overstating the achievable sale price.
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