Land valuations for the contractor's basis
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1. Background
The land values to be used for the purposes of contractor’s basis valuations have been assessed by the VOA’s Property Services team.
The majority follow a published report for DCLG, compiled by Property Services, with additional work undertaken on land categories and regions that did not form part of that exercise, for example Wales. There is however one significant exception concerning residential values, see “2.4” below.
The valuation date of the DCLG report of 1st March 2015 is considered sufficiently close to the R2017 AVD for the data to be relevant.
2. Categories, regions and other detail
2.1 Categories
The attached spreadsheet (appendix 1) containing the data is self-explanatory, but in summary there are 6 categories of land including:
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Residential
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Industrial
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Amenity
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Car Parking
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Agricultural
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Commercial (i.e. offices), split into edge of town/city and out of town/city business park localities.
2.2 Regions
The categories of land are broken down regionally and in some cases (eg industrial) to Billing Authority (BA) level, see spreadsheet for more details. There are 6 distinct regions in London identified, with North and South separated by the River Thames. Tab “1” on the spreadsheet provides a look-up table for determining which BA falls into which region.
Residential values for a particular BA are based on a typically average town or city within that BA, see tab “2” for details.
Regional industrial values represent a valuation for each region, as opposed to a straight average of all the BA values.
High value airport locations have been singularly identified and valued, see tab “3” for more details.
Tab “4” provides details of extremes of values in some of the commercial category localities.
2.3 Assumed Size of Take and Density
Each value is based on a one hectare take of average density, in an average location within the relevant BA/region, with no abnormal development costs:
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For those BA’s and regions outside London, the hypothetical scheme is for a development of 35 two storey dwellings with a total floor area of 3,150 square metres.
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For BA’s and regions within London, the hypothetical scheme is for a multi storey development of 269 flats with a net sales area of 19,722 square metres.
This is largely considered sufficient for rating purposes, but valuer judgement may need to be exercised for exceptional density’s or quantum of land take as compared to the above.
2.4 Residential value factors
The figures shown on the spreadsheet assume that planning consent is in place and that the consent fully complies with affordable housing requirements. Note that the percentage of affordable housing required (and the tenure mix) impacts on the concluded land value. This can result in BA districts with similar base values having significantly different land values where one has a higher affordable housing requirement. It can also create apparent anomalies, for example where apparently more valuable BA’s have lower land values due to their specific, possibly more onerous, planning policies in this respect.
Rating is concerned with market value which means it is appropriate to reflect any factors that affect this; affordable housing planning policies being one such factor. In this respect the residential values shown on the spreadsheet represent a departure from the DCLG published data which assumes non-compliance with affordable housing policies.
2.5 Using the data
Valuations on a price/ha basis may be taken straight from the spreadsheet.
For all other contractor’s basis valuations based on a percentage of adjusted replacement cost, the level of percentage adopted will have been calculated by the VOA’s National Specialist Unit, informed by the data on the spreadsheet. Please consult the relevant Practice Note for the class in question for confirmation of which percentage to apply.
It is emphasised that these values are indicative and should not detract from valuer judgement in specific instances, for example quantum. The same applies to the land value categories applicable to the various property classes, these columns on the spreadsheet are also meant to be indicative, not prescriptive.
Appendix 1: Further CB land value data
1. Background
The land values to be used for the purposes of contractor’s basis valuations have been assessed by the VOA’s Property Services team.
2. Categories, regions and other detail
2.1. Categories
The attached spreadsheet (appendix 1) containing the data is self-explanatory, but in summary there are 5 main categories of land including:
- Residential Suburbs
- Residential Central Fringe
- Industrial
- Amenity
- Agricultural
2.2 Regions
The categories of land are broken down regionally and in some cases (for example industrial) to Billing Authority (BA) level, see spreadsheet for more details. There are 6 distinct regions in London identified, with North and South separated by the River Thames. Tab “2” on the spreadsheet provides a look-up table for determining which BA falls into which region.
Residential values for some beacon towns and cities within a region (see tab “3” for details) have been considered and an indicative value for each region determined.
Regional industrial values represent an indicative value for each region.
High value airport locations have been singularly identified and valued at the bottom of the spreadsheet, see tab “4” for more details.
2.3 Assumed size of take and density
Each value is based on a one hectare take of average density, in an average location within the relevant BA/region, with no abnormal development costs.
2.4 Residential Suburbs value
The figures shown on the spreadsheet outside of London assume the construction of semi-detached houses in the suburbs, and that planning consent is in place which fully complies with affordable housing requirements. Note that the percentage of affordable housing required (and the tenure mix) impacts on the concluded land value. This can result in towns/cities with similar base values having significantly different land values where one has a higher affordable housing requirement. It can also create apparent anomalies, for example where apparently more valuable locations have lower land values due to their specific, possibly more onerous planning policies at the antecedent valuation date.
For the London areas residual valuations based on a higher density of development appropriate for each location have been completed.
Rating is concerned with market value which means it is appropriate to reflect any factors that affect this; affordable housing planning policies being one such factor.
The regional indicative values less 20% (R less 20% column) should be used where the prevailing land use is residential.
The 20% discount is applied following the leading case of Dawkins (VO) v Royal Leamington Spa BC and Warwickshire CC [1961] RVR 291 (see Rating Manual Part 3: The Contractor’s basis of valuation).
2.5 Residential Central Fringe area values
In most central and fringe areas residential and commercial land use are in competition. Residual residential valuations reflecting the higher density of dwelling units in more central areas have been completed for beacon towns and cities in each region. These values reflect the likely density of development and reflect any factors that affect this such as affordable housing provision. These beacons will provide a guide and interpolation will be necessary using valuer judgement.
2.6 Industrial values
The figures shown are based on secondary locations and do not reflect prime sites such as those with motorway links.
For classes of property within the industrial mode or category the Industrial levels should be taken from the spreadsheet. Where exceptionally the hereditament is of a mode or category where Practice Note advice for the class states that a discounted industrial land value is to be adopted then the indicative discounted value in the spreadsheet should be applied.”
2.7 Amenity land values
Amenity values are adopted as the developed land value for certain classes due to their location. Practice notes for property classes will provide guidance. Amenity values are also applied to undeveloped areas, often within larger hereditaments.
2.8 Agricultural value
Regional values applied.
2.5 Using the data
For some classes the stage 3 land value in contractor’s basis valuations is based on a percentage of adjusted replacement cost. The appropriate level of percentage to adopt has been calculated by the VOA’s National Valuation Unit, informed by the data on the land value spreadsheet.
Please consult the relevant Practice Note for the class in question for confirmation of the appropriate percentage to apply.
It is imperative that individuals have regard to the relevant practice notes which will indicate the approach to adopt for stage 3 of the Contractor’s Basis.
It is emphasised that these values are indicative and should not detract from valuer judgement in specific instances, for example quantum.