Introduction and how to price a plot?

[giacomo_z]

Hi,

New to the forum, although I have been reading for a while.

 

My wife and I are currently based just outside Cambridge and moved to the UK about 3 years ago from Italy (both Italians).

 

I would like to kick off with a question. How would you value a half an acre plot, reserved to self builders in a new development of ~40 properties? I know that a smaller 0.14 acre plot in the same estate has been sold for £120k and that a newly built house on a similar 0.14 acre plot is on the market for £425k (non self built). All these self build plots only have OPP.

 

The simple answer I guess would be to scale linearly (3 times bigger plot, 3 times more expensive) but also I guess the potential value of the home built on it would be a consideration and I don’t think the value would be 3 times as much (e.g. £1.2M). 
 

Any thought from more experienced people would be much appreciated.

 

Thanks,

Jack

[Bonner]

Benvenuto! 

You are correct, a larger plot does not make the finished property proportionally more valuable. Depends on the size of house as a larger plot should accommodate a much bigger house. Plot value = finished property value - build cost (inc. all fees and utilities etc.) - profit margin/contingencies. It would be worth talking to a few estate agents. 

If the 0.5 acre plot is restricted to a single dwelling, I would guess £200-220k. If there is any chance of getting permission to build several houses, you can double the value!

[giacomo_z]

I don’t think the plot could be subdivided because there are several restrictions imposed by the council (e.g. penalties for selling sooner than a minimum number of years). Also, because it all belongs to one developer, I would think they would have subdivided before selling to maximise profit if this was a possibility.
 

Good tip about talking to estate agents, as some properties on that estates are actually for sale so they must have done some research on that market.

 

Thanks,

Jack