What is “hope value”?
In plain terms, hope value in land is the extra amount a buyer would pay for land today because they believe it has a realistic prospect of a more valuable future use – most commonly, believing that planning permission will be granted for development.
In more formal valuation language, it’s the element of market value above existing use value (EUV) that reflects the prospect, not the certainty, of that future use. This definition aligns with RICS guidance and long-standing practice in development valuation.
Think of it as priced-in potential
If a paddock is worth £100k as agricultural land but a rational buyer believes there’s a plausible pathway to 20 homes, they won’t value it only as a field – they’ll attribute agricultural hope value for that future scenario.
Why hope value in land matters
- Sellers want to capture as much of that upside as possible at the point of sale (or via overage) – this can be achieved with the LVA Method™.
- Developers need to avoid overpaying for unproven potential, while still being competitive.
- Landowners under CPO threat need clarity on whether hope value is compensable (more on this below).
Get hope value of land and associated property wrong and you either leave money on the table or you buy risk you can’t easily unwind.
Want to increase the hope value of your land? Find out how the LVA Method™ can add an incredible uplift to land value.
Where hope value shows up in planning permissions and valuation
1) Open market transactions
Agents and developers price sites by weighing probabilities of planning success, timeframes, infrastructure cost, policy risk, BNG/ESG obligations, and exit values. If the path to permission is credible, the bid includes hope value. If policy is ambiguous or infrastructure costs are opaque, buyers discount it.
2) Planning permission as the catalyst
Hope value typically rises as the likelihood and clarity of permission improve – pre-app feedback, plan allocation, supportive policy changes, and deliverable mitigation all move the dial. Conversely, constraints (heritage, flood risk, access, viability, nutrient neutrality, on-site BNG feasibility) can suppress or even erase hope value.
3) Compulsory purchase (CPO) compensation
Under the Land Compensation Act 1961, compensation usually reflects market value, which can include hope value by reference to realistic planning prospects – assessed using the “planning assumptions” (s.14).
However, the Levelling-up and Regeneration Act 2023 introduced a power for acquiring authorities (with confirmation) to disapply hope value in certain CPOs – especially for schemes delivering clear public benefits (e.g., affordable housing, regeneration). Government guidance explaining this “power to remove hope value” was issued in 2024 and sits within the updated CPO guidance collection. In short: in defined circumstances, compensation can be limited toward existing use value rather than speculative development value.
What this means: if you face a CPO, your entitlement to hope value is now context-dependent, turning on whether the authority seeks and secures a direction to remove it, and whether statutory tests are met. Professional bodies and practitioners have parsed the implications since 2023–25; the direction is not automatic and must be justified and confirmed.
The policy environment that shapes hope value in land
Policy moves change probability. A few live examples:
- CPO reforms & land value capture. Recent guidance and commentary emphasise enabling public interest schemes and, where directed, reducing compensation by excluding hope value—shifting bargaining dynamics around strategic sites.
- Biodiversity Net Gain (BNG). Since 12 February 2024, most permissions in England must deliver a 10% BNG (with defined exemptions and transitional rules). This can lower residual land value unless design and offset strategies are optimised. BNG obligations therefore affect what portion of the “future value” is investable and, by extension, the rational level of hope value.
Bottom line: hope value is not static; it is policy-sensitive and should be recalibrated when rules and guidance move.
How to think about hope value and planning permission – without guesswork
We see two common errors:
- Spreadsheet heroics: assuming a single “blended” probability uplift with a broad-brush discount.
- Narrative bias: over-weighting a supportive pre-app note and under-weighting hard constraints.
Intelligent Land’s approach is different: we treat hope value as an output of rigorous planning logic + data + scenarios, not an input to “make the deal work”.
How Intelligent Land’s Land Value Accelerator™ (LVA Method™) helps
Land Value Accelerator™ – Unlocking Hidden Millions.
Black-Box Insights, White-Glove Results.
We combine proprietary AI with 30 years of planning expertise to map credible, testable pathways from today’s use to tomorrow’s value. The LVA Method™ has three steps:
- Review Planning Permissions – We interrogate the current status: existing consents, refusals, Section 106/conditions, emerging local plan context, 5YHLS, design codes, constraints (highways, utilities, flood, heritage, landscape), and decision-maker behaviour.
- Undertake Research – Technical, legal, BNG, ESG and planning research. This includes capacity testing, transport & access logic, drainage strategy direction, energy/NPF compliance, nutrient neutrality, and likely s106/CIL headroom.
- Scenario Testing – Our AI models simulate thousands of planning and design permutations to identify the most defendable route to permission and the value-maximising mix (density, typologies, phasing, mitigation, off-site BNG vs on-site habitat creation). We quantify probabilities, timeframes and cost-to-permission, converting uncertainty into an investable narrative – often revealing £1m+ value uplift within 24 hours in many cases.
Where LVA adds tangible value on hope value
- From “speculative” to “evidenced”: We transform a rule-of-thumb hope value into a probability-weighted, policy-defensible case, increasing buyer confidence and saleability – or sharpening your negotiating stance once you know the true worth of your building land per acre.
- BNG-aware layouts: By optimising site layouts and BNG development strategies (e.g., habitat banks vs on-site design), we can recover residual value that would otherwise depress hope value.
- CPO readiness: If you face a potential CPO, we model with and without hope value directions, assemble planning evidence for realistic prospects, and support representations to resist any attempt to strip hope value where unjustified. We also simulate fallback uses to anchor compensation.
- Deal architecture: We structure overage, and option mechanisms aligned to scenario outcomes—so you participate fairly in upside while keeping transactions bankable.
- Time-to-permission compression: By focusing effort on the high-probability route, we reduce planning drift, improving IRR and supporting higher justifiable hope value.
Hope value in practice: three real-world situations
Unallocated edge-of-settlement land
The owner suspects the next Local Plan may release land. LVA maps the political trajectory, 5YHLS pressure, transport capacity, and BNG load. We find a design code-compliant entry point with a deliverable access solution and a biodiversity plan that avoids costly off-site units – raising the probability of outline consent within 18–24 months. Result: higher, defendable hope value today; structured overage on detailed consent.
Urban brownfield with partial constraints
Historic contamination, tight access, and a vocal neighbourhood forum have cooled bids. Scenario testing shows that a mixed-use ratio shift + micro-mobility parking solution + heritage-led massing secures officer support in principle, with BNG delivered off-site at a verified local habitat bank. Result: hope value moves from “discounted” to “investable,” unlocking funding.
Potential CPO corridor
A local authority signals a regeneration scheme with possible CPO. We assemble the planning prospects dossier for the site independent of the scheme, identify acceptable alternative development (AAD) parameters, and set out value evidence assuming no disapplication of hope value. Result: stronger compensation position; if a direction to remove hope value is sought, we’re prepared with technical objections and negotiated alternatives.
Is hope value the same as “planning uplift”?
Related, but not identical. Hope value is ex-ante—reflecting probability-weighted future use. Planning uplift is the ex-post step change once permission is granted.
Can authorities now just “remove” hope value in every CPO?
No. A direction to remove hope value must be requested, justified and confirmed, and it applies in defined circumstances. It is not automatic.
Does BNG always reduce hope value?
Not always. Poorly designed schemes can suffer. But smart layout, habitat design and off-site strategies can protect or enhance residual land value—and thus hope value.
How to maximise the hope value of your land – next steps
- Evidence the planning route. Replace assumptions with documented prospects and clear mitigation.
- Quantify probabilities and time. Investors pay for clarity and speed.
- Optimise for BNG/ESG. Design decisions made now can save millions later.
- Plan for CPO scenarios. If relevant, prepare an evidence pack that supports compensable hope value—or strengthens negotiation if a disapplication is sought.
The most important action you can take though is to…
Work with Intelligent Land
Intelligent Land unlocks hidden millions in land value by combining proprietary AI algorithms with 30 years of planning expertise.
We don’t just advise; we accelerate outcomes.
Do this…
- Read about the Land Value Accelerator™ (LVA Method™)
- Then book a discovery call
