When people ask, “What determines the value of land?” they often expect a neat formula. But in reality, it’s not like that. Land value is a stack of interlocking variables including factors such as planning, policy, psychology, and pure practicality. Below, we break down the factors that affect the value of land (with plain-English explanations), then show how Intelligent Land’s Land Value Accelerator™ (LVA Method™) goes beyond traditional valuation to increase it.
Factors that affect the value of land
Here’s a short list of 20 factors that affect the value of land. Use this as your due-diligence checklist. It covers what determines the value of a piece of land in the UK today.
1) Planning status & policy fit
- Current permission (outline/full) and conditions.
- Policy alignment with the National Planning Policy Framework (NPPF) and local plan.
The NPPF was revised on 12 December 2024 (with minor corrections on 7 February 2025), which materially shapes what’s “in principle” acceptable. Here’s a guide to the value of land with planning permission.
2) Green Belt, designations & constraints
Green Belt policy exists to prevent urban sprawl and protect openness; it carries strict tests for very special circumstances, so it can strongly depress or redirect value uplift.
3) Biodiversity Net Gain (BNG) requirement
Most schemes must now deliver a minimum 10% BNG. It became mandatory for planning applications made on or after 12 February 2024 (with small-site provisions following). Land with on-site BNG delivery potential, or credible off-site/credit strategies, can preserve or boost residual values.
4) Flood risk & drainage
Flood Zones (1/2/3/3b), sequential/exception tests, and surface-water strategy influence what, where, and how much you can build, hence helps to determine land value.
5) Access & highways
Adopted road access, visibility splays, trip generation, transport nodes, and the cost/achievability of new junctions.
6) Utilities & capacity
Electric, water, gas, telecoms: availability, upgrades, and connection costs.
7) Ground conditions
Topography, contamination, geotechnical risk; remediation and abnormal costs change developers’ residual appraisals.
8) Size, shape & layout efficiency
Regular plots with efficient block depths and logical phasing tend to command higher values.
9) Market comparables & buyer demand
Comparable evidence remains a cornerstone of valuation – adjusted for quality, timing, and conditions. Poorly chosen comparables skew value.
10) Section 106 & CIL burden
Planning obligations (S106) and Community Infrastructure Levy (CIL) obligations erode residual land value, clarity and negotiability matter.
11) Density & mix potential
Higher unit counts or superior mix (e.g., dual-aspect flats, family housing) can lift gross development value – subject to design, daylight/sunlight, and amenity standards.
12) Design quality & buildability
Viable construction methodologies, modern methods of construction (MMC), and rationalised typologies reduce costs.
13) Tenure & title
Easements, ransom strips, restrictive covenants, rights of way – all can constrain or determine land value.
14) Phasing & cashflow
Phased infrastructure and early revenue plots reduce peak debt and risk, improving what a developer can pay.
15) ESG profile
Energy strategy, Net Zero pathways, and nature-positive design can enhance sales velocity and pricing.
16) Local infrastructure & place assets
Schools, transport, employment nodes, and amenities shape absorption rates and pricing.
17) Policy fluidity & reform risk
Live or emerging policy reforms can materially change feasibility and obligations. For example, autumn 2025 proposals to temporarily ease certain London planning requirements and adjust affordable housing expectations signal how quickly land viability assumptions can shift.
18) Interest rates & finance conditions
Debt costs and lender appetite move residual values (noting broader macro shifts).
19) Exit strategy certainty
Pre-lets, forward-funds, and registered provider interest can stabilise income and raise land bids.
20) Planning risk narrative
How you tell the story can help to determine the value of land – need, benefits, mitigations. – matters. A well-framed narrative can change outcomes (and therefore value).
How do I determine a plot’s value? A practical sequence
If you’re thinking, “How do I determine a plot’s value?” start here:
- Evidence sweep: Pull title, constraints, utilities, flood, transport, ecology, heritage, and policy extracts.
- Comparable appraisal: Build a transparent baseline: GDV, build costs, abnormals, S106/CIL, finance, developer’s profit, residual land value. Use relevant, recent comparables.
- Planning & policy gap-analysis: What must be delivered (BNG, design codes, affordable housing), what can flex, and what has negotiation headroom?
- Viability stress-tests: Run downside (cost inflation, interest rates) and upside (density, mix, phasing, tenure blend) scenarios.
- Narrative & stakeholder strategy: Sequence pre-apps, engagement, and supporting evidence to de-risk the decision-maker.
This will give you a defensible current value of building land per acre – but it still misses something important: hidden value.
And this is where we can help maximise your land’s value…
Why traditional valuations miss hidden value
Conventional valuation is designed to price what’s obvious, not to discover what’s possible, or hopeful. It often stops at today’s policy interpretation, a narrow set of comparables, and a single “best guess” appraisal. In practice, value is highly path-dependent: change the planning route, the layout, the tenure strategy, the BNG solution—or the story—and the same piece of land can be worth dramatically more.
That’s where Intelligent Land comes in.
The Land Value Accelerator™ (LVA Method™): from “what it’s worth” to “what it could be worth”
Intelligent Land blends proprietary AI with three decades of planning expertise to unlock hidden millions in land value. We don’t just advise; we accelerate outcomes. Land Value Accelerator™ – Unlocking Hidden Millions. Black-Box Insights, White-Glove Results.
Step 1: Review Planning Permissions
We forensically assess the current planning position—permissions, conditions, obligations, and policy headroom—against the latest national and local policy context (including the December 2024 NPPF updates and subsequent clarifications in February 2025).
Step 2: Undertake Research
Our team compiles technical, legal, BNG, ESG, flood, transport, utilities, market, and stakeholder intelligence. We quantify where obligations are fixed, where they’re negotiable, and where smart design or phasing unlocks viability. (BNG is mandatory for most new applications since 12 Feb 2024, so we model on-site/off-site solutions and credits to preserve value.)
Step 3: Scenario Testing
This is the “explore engine.” We run AI-driven scenarios—density ranges, tenure blends, block forms, BNG delivery strategies, S106/CIL negotiation pathways, and narrative framing—to surface non-obvious value pathways. The result is not one valuation but a menu of optimised outcomes with clear next steps. In many cases, that unlocks £1m+ value uplift within 24 hours of engagement.
A quick (anonymised) example
- Baseline: Edge-of-centre site, surface parking, Flood Zone 2 edges, initial advice assumed low density and heavy S106.
- Constraints reframed: Adjusted layout to avoid depth in higher-risk cells; introduced blue-green infrastructure that doubled as amenity; reshaped mix to meet local demand; proposed off-site BNG credits instead of costly on-site habitat creation.
- Outcome: Fewer abnormals, higher absorption, reduced obligations through viable alternatives—and a multi-seven-figure residual uplift versus the “obvious” scheme.
Putting it all together: a smarter way to value land
If you remember one thing, make it this: the value of land isn’t found; it’s created. Yes, you must account for the fundamentals—policy, BNG, flood, S106/CIL, comparables—but the real uplift lives in scenarios: design, phasing, tenure, obligations strategy, and a persuasive planning narrative aligned with the most current policy climate. (Keep an eye on evolving reform signals—London’s temporary easing proposals and national planning changes show how quickly viability assumptions can move.)
Ready to determine (and increase) your plot’s value?
Developers & landowners: If you’re weighing options and want more than a single-point valuation, the Land Value Accelerator™ (LVA Method™) gives you speed, certainty, and uplift – often £1m+ within 24 hours.
Intelligent Land: We don’t just advise; we accelerate outcomes.
Next step: Book an LVA review and we’ll show you the delta between the “obvious value” and the maximum deliverable value – backed by planning intelligence, AI exploration, and a clear action plan.
