Valuing land can be a complex issue particularly when it involves someone buying a piece of land from a neighbour.
The reasons for wanting to buy the land can vary from merely extending garden space, to creating room for an extension, space for new outbuildings or opening up alternative accesses.
In most of these cases there is already a relationship between the neighbours involved and the matter has been discussed and agreed in principle. However, despite this, it is likely that both parties will need and want advice and information on land valuation, as well as advice on what might be a fair price.
Valuing land this way is not a straightforward task. Generally, these situations tend to involve relatively small slivers of land which have no intrinsic open market value to anyone but the neighbouring properties.
In such cases an assessment of the marriage value to the benefitting property should be provided and an assessment of any diminution in value to the seller.
Other factors that need to be taken into consideration before a valuation can be made will be whether there is any development potential, any legal title issues, physical constraints such as flooding, access to the land, the impact on wildlife and whether there are any trees that need to be protected or if there is an eye on felling them. If the land is protected from development or if it is in a particularly expensive area then this will also have an impact on its value.
Once all these factors have been checked and discussed it will be easier to make an assessment of what represents fair value.
At Sheldon Bosley Knight, we regularly get called out to advise on these types of situations and have found that our input is helpful in providing independent expert advice.
So, if you are involved in such discussions and would like to know more about the process, or if you are thinking about buying or selling a piece of land, please give us a call and see how we can help you.