Guidance

Land value estimates for policy appraisal: guidelines for use

Published 16 March 2026

Applies to England

Overview

1. These generic land values have been developed for use in economic appraisal for projects, programmes and policies. This note outlines the approach and assumptions used. The land value estimates cover the following broad categories of land:

a) Industrial – a typical urban/suburban brownfield location with uses industrial/warehouse

b) Distribution – a distribution warehouse with adjoining motorway links

c) Agriculture – farmland in a typical agricultural location within the area

d) Office – a town and city centre office in urban locations and an out of town office in smaller urban and rural locations

e) Retail – a typical 2 storey shops

f) Car parks – a typical commercial car park

g) Residential – typical edge of town residential development in locations which on average deliver lower density development, alongside flats in locations which on average deliver relatively higher density development

2. The values should be used in economic appraisal in conjunction with the MHCLG Appraisal Guide (2026) and in accordance with the HMT Green Book (2026). Careful consideration should be given to the applicability of the land value estimates when used for any purpose other than that for which they were produced, which the Ministry of Housing, Communities and Local Government (MHCLG) does not recommend or endorse. Users should familiarise themselves with the methodology and assumptions set out below before using the land value estimates.

3. All non-residential land valuations are based on work procured by the MHCLG from the Valuation Office Agency (VOA). The residential land valuations have been developed by the MHCLG based on a residual land valuation model which utilises a mix of large-scale datasets and published government statistics. The method and presentation of outputs used here differs to previous land value estimates published in 2019. These values are therefore not directly comparable with the 2019 land value estimates for policy appraisal, or previous publications.

4. It is recommended that more tailored local land value data should be used to support land value uplift calculations rather than these generic land values, where available. Typically, this is gained through a site-specific development appraisal. These values are for use when that site-specific value is not available. The following are some examples of suitable use cases of the land value estimates for calculating land value uplift:

a) in the early stages of project development where a range of development options are being considered and where it has not yet been possible to carry out detailed local assessment of the value of development

b) for small projects where a detailed local assessment of land values may not be deemed proportionate

c) for programme, portfolio or fund level assessments where the projects or places being considered are not yet known

d) for analysis of emerging policy options e.g. at a government Spending Review or in regulatory impact assessments

5. These land values do not represent the market value of land. They, for example, exclude any developer contributions or affordable housing provision which impact the actual market price for land which would be considered in a commercial valuation. We would therefore expect the market price to be substantially lower than these values in many cases.

6. These land values should largely be considered as being reflective of serviced land parcels for development. They do not consider significant abnormal or infrastructure costs that can be associated with large scale developments or complex brownfield sites. It is therefore likely other adjustments to the estimates will be required which should be considered carefully depending on the use. For example, the land value should be adjusted downwards for a site which contains contaminated land to reflect the remediation costs necessary to develop the site.

7. The estimates are designed to provide a consistent approach across areas in England for each land use category. Any residual valuation is sensitive to small changes in model parameters and inputs. As a result the values of a specific site may vary significantly from the typical site value for that local area provided here. That is why a site-specific development appraisal is typically preferable.

8. All sites are assumed to be freehold with vacant possession. It is assumed that good title can be shown, and that the land is not subject to any unusual or onerous restrictions, encumbrances, or outgoings. It is assumed that the land and its value are unaffected by any statutory notice or proposal or by any matters that would be revealed by a local search and replies to the usual enquiries, and that neither the proposed construction of the new property will be unlawful or in breach of any covenant.

9. The valuation date throughout all valuations is 1 October 2023. The MHCLG Appraisal Guide (2026) details how changes to land values over time should be considered in economic appraisal.

Non-residential Land Values

10. A total of 414 sites have been selected and valued to estimate their non-residential land value. The geography at which different types of sites have been selected differs to reflect the variation we would expect in that particular land type around England. The number of sites sampled and presented in the outputs is as follows:

a) industrial – 119 sites. This is broken down into 7 major commercial centres, 102 other large towns & cities and a sample of 10 London boroughs

b) distribution – 9 regions. This represents 1 site per region of England

c) agricultural – 9 regions - 27 sites. This represents 3 sites per region of England, broken down by quality of land

d) office – 133 sites. This is broken down into 7 major commercial centres (each with a primary, secondary, and tertiary site),102 other large towns & cities and a sample of 10 London boroughs

e) retail – 126 sites. This is broken down into 7 major commercial centres (each with a urban and suburban valuation), 102 other large towns & cities and a sample of 10 London boroughs

11. The 7 major commercial centres are: Leicester, Bristol, Birmingham, Manchester, Liverpool, Leeds, and Sheffield. The 109 large towns and cities are defined as all remaining Built Up Areas in England with a usual resident population over 75,000 from the 2021 census published by the Office for National Statistics (ONS). This is also defined by the ONS as all ‘Major’ and ‘Large’ Built Up Areas.

Industrial Land Values

12. These valuations have been completed using the comparable method of valuation. The valuations were undertaken as a desk-based exercise. A description of different valuation methods is provided at the bottom of this document. Research of sales evidence has been undertaken for each site using the internal VOA database and external sites such as CoStar, Essential Information Group (EIG) and discussion with other Valuers where required.

13. The values provided reflect a hypothetical site, assuming: 

a) a typical urban/suburban, brownfield location, with nearby uses likely to include later, modern residential developments

b) that each site is 1 hectare in area (although this area can be adjusted where felt appropriate by the two parties for specific types of development), of regular shape, with services provided up to the boundary, without contamination or abnormal development costs, not in an underground mining area, with road frontage, without risk of flooding, with planning permission granted and that no grant funding is available 

c) the land and its value are unaffected by any statutory notice or proposal or by any matters that would be revealed by a local search and replies to the usual enquiries, and that neither the proposed construction of the new property will be unlawful or in breach of any covenant

Distribution Land Values

14. These valuations have been completed using the comparable method of valuation. The valuations were undertaken as a desk-based exercise. Research for sales evidence has been undertaken using the internal VOA database and external sites such as CoStar, EIG and discussion with other Valuers if required.

15. The values reflect a hypothetical site, assuming: 

a) prime industrial land for distribution warehousing, adjoining motorway links etc

b) initially that each site is 1 Ha in area, of regular shape, with services provided up to the boundary, without contamination or abnormal development costs, not in an underground mining area, with road frontage, without risk of flooding, with planning permission granted and that no grant funding is available

c) the land and its value are unaffected by any statutory notice or proposal or by any matters that would be revealed by a local search and replies to the usual enquiries, and that neither the proposed construction of the new property will be unlawful or in breach of any covenant

Agricultural Land Values

16. These valuations have been completed using the comparable method. The desk-based valuations have been undertaken by a specialist agricultural team within the VOA. Further research for sales evidence has been undertaken using internal VOA database EIG. Use of external tools such as Magic Maps and Agricultural Land Classification (ALC) Grades data has been used to determine land quality of comparable evidence found (see explanation on grades below). A value for each region is provided for poor and very poor (grades 4 & 5), good to moderate (grades 3a and 3b) and excellent and very good (grades 1 & 2) quality agricultural land. These definitions are based on Department for Environment, Food and Rural Affairs (DEFRA) agricultural land classifications for England and Wales.

17. The values provided reflect a hypothetical site, assuming: 

a) a typical agricultural location within the region

b) accommodation land only (i.e. no connection with a farmhouse of other buildings)

c) value appropriate for a commercial agricultural user, excluding any uplift for ‘pony paddock’ market or hope value

d) the site is not at significant risk of flooding and is without contamination

e) pastureland is fenced and with water supply / arable land is in good heart

f) adjustment for quantum where appropriate

Office Land Values

18. These valuations have been undertaken using the comparable and residual methods of valuation. The valuations have been undertaken on a desk-top only basis without inspections of the localities and assume:

• any liability for the Community Infrastructure Levy (CIL), even where it was Planning Policy as at 1 April 2019, has been excluded
• full Planning Consent is already in place
• that no grants are available and that no major allowances need to be made for other s106/s278 costs
• no allowance for abnormal construction costs

19. The values for offices are provided for hypothetical sites (outside London) assuming the following site typologies:

a) out of town offices – assumed to be in business park type location; one hectare site; three storey offices; 10,187 sq. metres net (11,984 sq. metres gross). Net Developable area of site – 40%

b) city centre offices – edge of the Central Business District (CBD); 0.12 hectares; four-storey construction; 4,106 sq. metres net (4,831 sq. metres gross). Net Developable area of site – 100%

c) for the seven major commercial centres, the VOA provide three lands values for Primary, Secondary and Tertiary city centre accommodation

20. In London, the values for officers are provided for hypothetical sites assuming the following site typologies:

a) 0.12 hectares, Grade A space

b) 12,077 sq. metres gross – 9,662 sq. metres net (Inner London)

c) 12,050 sq. metres gross - 10,266 sq. metres net (Outer London)

d) net Developable area of site – 100%

21. For the 102 large towns and cities the appraisals for offices have been run based on the most appropriate type of office accommodation within the vicinity. For our purposes the definitions for Primary, Secondary and Tertiary premises are as follows:

a) primary – Brand new, Grade A offices, within CBD

b) secondary – Brand new, Grade A offices not within CBD but elsewhere in the City Centre

c) tertiary – Poorer quality office accommodation, either purpose built or conversion on edge of city centre

Retail Land Values

22. These valuations have been undertaken using the comparable and residual methods of valuation. The valuations have been undertaken on a desk-top only basis without inspections of the localities and assume:

• any liability for the Community Infrastructure Levy (CIL), even where it was Planning Policy as at 1 April 2019, has been excluded
• full planning consent is already in place
• that no grants are available and that no major allowances need to be made for other s106/s278 costs
• no allowance for abnormal construction costs

23. The values for retail are provided for hypothetical sites assuming the following site typologies:

a) for city/town centre units - a two-storey shop unit with overall NIA of 115.2 sq. m, ITMS – 54.7 sq. m. Site area is assumed to be the Gross External Area (GEA) of the building (0.02 ha). Net Developable area of site – 85%

b) for suburban / smaller town - a two-storey shop unit with overall NIA of 64 sq. m, ITMS – 31.2 sq. m. Site area is assumed to be the GEA of the building (0.01 ha). Net Developable area of site – 85%

24. For the seven major commercial centres, the VOA provides two land values for city centre and suburban retail units. For the 102 other towns/cities and the London boroughs, the valuations are based on the city/town centre location and its assumptions.

25. The figures provided are appropriate to a single, hypothetical site and should not be taken as appropriate for all sites in the locality. In several cases schemes do not produce a positive land value in the valuation.

Car Park Land Values

26. We provide a land value estimate for open surface car parking. VOA records of past valuations, rental evidence for car parking spaces from 2021 and 2024 has been compiled and analysed to calculate an appropriate rate per space for each city/town.

27. Using the investment method of valuation a gross rent has then been established on the assumption that a 1 hectare site would comprise 385 spaces. This rent has been capitalised using an appropriate yield to arrive at a gross car park value for each location. The yield adopted reflects the desirability of and likely demand for car parking within the specific locality. From the gross values, maintenance and running costs have been deducted at 6.5% to produce a net value per hectare.

Residential Land Values

28. The residential land valuations have been undertaken using a large-scale residual land valuation model developed by the MHCLG. This involves estimating the Gross Development Value (GCV) and deducting an assumption for the development costs, including allowances for build costs, developer profit, marketing costs, fees, finance, etc., to leave a “residual” for the site value.

29. These outputs should be taken as reasonable averages in the context of this exercise and with a view to maintaining a consistent set of assumptions across England. Individual schemes in many local areas will differ from these averages for a variety of site-specific and hyper location-specific reasons. This is why local land value data from a development appraisal of a site is typically preferable.

30. The valuation model uses a data driven approach to calculate local council area average residential land values under different density and house price scenarios. This differs to the VOA land valuations using the residual method which focuses on valuing a selection of individual locations in the areas selected. The MHCLG residual valuation model uses data from:

• land registry price paid data which contains house prices
• Office for National Statistics (ONS) House Price Index
• MHCLG Energy Performance Certificate (EPC) data
• commercially obtained Building Cost Information Service (BCIS) data which contains average build costs
• site density implied from MHCLG official statistics - net additional dwellings and land use change
• site density implied from commercially obtained data from the company Glenigan

31. It is assumed:

• each site is 1 hectare in area, of regular shape, with services provided up to the boundary, without contamination or abnormal development costs, not in an underground mining area, with road frontage, without risk of flooding, with planning permission granted and that no grant funding is available. This therefore represents a serviced land parcel
• the site has a net developable area equal to 80% of the gross area (excluding London)
• the gross development value of all affordable housing provision on the site is estimated as if it were 100% private market housing (except when calculating for the ‘floor value’). The figures on this basis may be significantly higher than could reasonably be obtained for land in the market. This is assumed for economic appraisal purposes to reflect the full economic and social value of the land in its new use
• full planning consent is already in place, that no grants are available and that no major allowances need to be made for other s106/s278/Community Infrastructure Levy (CIL) costs
• the following standard set of assumptions in table 1 below:

Description	Value
Base Build Cost	BCIS 40 Percentile across Housing and Flats
Externals	10% of Base Build Cost
Contingency	5% of Base Build Costs and Externals
Professional Fees	8% of Base Build Costs, Externals and Contingency
Market and Agent Fees	3% of Gross Development Value
Legal Sale Fees	£1,000 per home
Normal Profit	17.5% of Gross Development Value
Finance Rate	7.0%
Land Acquisition Agent and Legal Fees	1.75% of Land Acquisition Cost

32. We assume two different mixes of property type – detached houses, semi-detached houses, terraced houses, and flats – based on average densities of housing on developments in that local area. This is divided into:

a) site densities above 80 dwellings per hectare which are assumed to have only flats

b) site densities of 80 dwellings per hectare or below which are a mix of detached, semi-detached, and terraced houses.

33. The density of homes on developments varies throughout England due to a number of factors. To reflect this and to give practitioners choices based on their use case, the model outputs present a low, central and high site density scenario. The central site density scenario has been defined using implied average densities derived for each local council over the last 10 years from two sources: MHCLG statistics – Housing Supply: net additional dwellings and land use change statistics. A sensible variation between this and the low and high site density scenarios is then estimated using the distribution of density of different sites in each local council area from commercially obtained Glenigan data. We therefore expect the density of many major residential serviced land parcels for development for that area will be between the low and high site density scenarios. The number of homes per hectare under each density scenario for each council area is published alongside the residential land values. Appraisers should consider where and what the development is when selecting what to use, and sensitivities should be conducted on any final values.

34. A density floor of 30 dwelling per hectare and a density ceiling of 400 dwelling per hectare has been applied across all density scenarios. Although sites can be outside this density, it is a sensible upper and lower bound to reflect the type of developments typically supported by the public sector.

35. Property prices vary considerably within a local area, with many council areas having multiple distinct housing markets that do not match up well with the administrative boundaries of a local council. To give practitioners choices to better reflect the type of housing delivered on the site and where the site is situated relative to the average house price location in that council area, we have provided estimates which cover a distribution of house prices covering the lower quartile, 40th percentile, median, 60th percentile, and upper quartile of new build house price per square meter within that local council area. It is expected that both the density and house price scenarios will support greater sensitivity testing of uncertainty within economic appraisal.

36. A minimum ‘floor value’ for each estimate has been set for use in economic appraisal. The land value estimate before the ‘floor value’ is applied is also provided. The floor land value is designed to ensure that when the residential land values are used to calculate land value uplift they give a credible lower bound result. The theory behind implementing a minimum ‘floor value’ is driven by the principal that for the Land Value Uplift on a site to be realised, it must be a viable development after any public sector funding, planning and developer contributions, including on affordable housing, are considered. The ‘floor value’ for each estimate is comprised of two parts:

a) This is derived from MHCLG published affordable housing statistics

b) an assumed acquisition price for the land being at least equal to ten times the relevant agricultural land value estimate as a proxy of existing use value

General Explanations of Valuation Methods Used

Comparable Method

37. The value of the land in the sales comparison or market approach is estimated by comparing the subject hypothetical site to similar sites that have sold within the locality. This method can be used where there is a good amount of reliable, recent, and open market comparable sales evidence available. When employing this method, Valuers collate, analyse, and adjust the relevant comparable evidence to reflect key differences between the comparable and subject being valued. Typical sources of comparable evidence include published databases, internal records, and discussions with other professionals.

Residual Method

38. The residual method is typically used for the valuation of land with development potential. The output is the expected value of the land, and it requires Valuers to make a variety of assumptions around input costs. To apply this method, Valuers first calculate the value of the finished scheme i.e. arrive at the Gross Development Value (GDV) based on market comparables. All development costs, including developer’s profit and finance costs, are then deducted from the GDV to arrive at a residual site value. Typically, the costs deducted from the GDV include:

• base construction cost – as a rate per square metre which is applied to the Gross Internal Area (GIA) of the proposed development. Rates are usually established using Building Cost Information Service Construction Data (BCIS)
• external works - The term ‘external works’ describes any works carried out to the external environment of a building project. BRE and RICS describe external works as all items outside the building footprint but inside the site boundary, encompassing the following
• site preparation works. Roads, paths, paving and surfacing. Soft landscaping, planting, and irrigation systems Fencing, railings, and walls. External fixtures, drainage, and services
• construction contingency – risk estimate which makes an allowance for unknown risks associated with the construction cost. Percentage of build cost
• agent and legal purchasers’ costs
• stamp Duty Land Tax (SDLT)
• professional Fees – as a percentage of build cost, relating to fees for professionals such as architect, quantity surveyor, structural engineer etc
• finance costs – based on market rates
• sales agents and legal fees
• disposal agent and legal fees/marketing costs
• developer’s profit on cost – target percentage profit that developer seeks as a return

39. The assumptions for each in the list above reflects the Valuers’ professional knowledge and expertise, and accepted industry norms having regard to the proposed hypothetical schemes and levels of risk. The input assumptions were agreed between the VOA and the MHCLG prior to undertaking the appraisals. It is worth noting that the estimates can be very sensitive to the inputs used within the appraisal. Therefore, Valuers often undertake sensitivity analysis to assess how changes to specific inputs will affect the resultant residual value of the land.

Investment Method

40. The investment method is used where there is an income stream to value, i.e. the property is tenanted. This can include commercial, residential, retail, industrial and agricultural properties. To use the investment method, an assessment is made of the rental values (market rent) and a market-based yield. A yield can be simply defined as the annual return on investment expressed as a percentage of capital value.