Residual land values
What remains for the land after development costs and other scheme requirements are accounted for? An early appraisal helps test whether the expectations placed on a site are economically achievable.
From allocation to delivery
Allocated land.
Deliverable homes.
Why land values, viability and land contracts should be an integral part of housing site selection and local plan allocations.
Explore the proposalResidual land valuesLand contractsDevelopment viabilityHousing delivery
The case for earlier assessment
Suitability is only part of the story.
Site selection is protracted, complex and subject to public scrutiny. Planning constraints, geographical restrictions and sustainability rightly receive detailed consideration.
But the economic and legal circumstances of a site can also determine whether housing is delivered—and whether the affordable housing and infrastructure expected by the community can be secured.
This is not a criticism of under-resourced planning departments. It is an argument for giving them a fuller picture of the sites on which their plans depend.
What is Land Economics?
The realities behind a housing allocation.
James Sorrentino uses “Land Economics” to describe the financial and legal matters that influence the delivery of a housing project.
Land contracts & covenants
Option agreements, minimum purchase prices and restrictive covenants can affect the route to delivery. Their existence and implications deserve scrutiny before an allocation is relied upon.
Policy-compliant development
Affordable housing, infrastructure and Section 106 obligations need to be considered alongside land costs. The objective is a deliverable scheme that supports the benefits anticipated in the plan.
Why contracts matter
A land deal can outlast the economics behind it.
Some landowner and developer agreements can run for 15–20 years. House prices, build costs and wider economic conditions may change substantially during that period.
A minimum price per acre may create a commitment that puts pressure on a scheme’s ability to fund infrastructure and affordable housing. Understanding those terms early can reveal where delivery risks need closer examination.
“Before relying on a site to meet our housing needs, we should understand the circumstances that could prevent it from doing so.”
James Sorrentino · The Land Economics argument
A practical proposal
Ask the delivery questions before allocation.
As part of the Strategic Housing Land Availability Assessment process, James proposes a confirmatory synopsis from the site promoter setting out salient facts that could affect delivery.
Is it time for Land Economics to become a prerequisite for housing allocations?
Require meaningful disclosure
Identify material financial and legal circumstances, including land contracts and constraints that could affect achievability or timing.
Undertake an independent cross-check
Local authorities should use proportionate appraisals to examine promoter assurances and identify where further evidence is needed.
Test the community commitments
Consider whether the site can sustain affordable housing, necessary infrastructure and a policy-compliant Section 106 agreement.
Build confidence in the trajectory
Use the findings to inform realistic expectations about housing delivery and anticipated five-year land supply.
From principle to appraisal
Start the right conversation with Landcycle.
Landcycle offers an indicative residual valuation for properties over ten acres, based on the assumption that the site is allocated for housing.
Visit LandcycleAn initial synopsis to help ask better questions
- An indicative number of homes that could be achieved.
- An estimate of residual land value following planning consent.
- A starting point for assessing planning obligations and infrastructure expectations.
Landcycle does not charge a subscription fee. Local authorities can use their PSGA number to access eligible Ordnance Survey data through the platform.
The appraisal is an initial estimate. Site-specific assumptions and contractual circumstances require further examination.
The perspective behind Land Economics
James Sorrentino
Chartered Town Planner · RICS Registered ValuerWith over 25 years’ experience in planning and strategic planning, James brings together the planning, valuation and contractual aspects of land development. He is a director at Lightwood Group and works on Landcycle.com, a planning and property platform.
His argument is simple: the financial and legal realities of land should be considered earlier, so housing allocations translate into delivery.
Follow James on LinkedInQuestions worth asking
Look beyond the allocation.
Why examine viability at the site selection stage?
An allocation may establish expectations about housing numbers, timing, affordable housing and infrastructure. An earlier understanding of site economics helps identify constraints before those expectations are relied upon.
What should a promoter’s synopsis cover?
The proposal is for a concise account of material financial and legal facts that could affect delivery: relevant contracts, minimum price obligations, restrictive covenants and other circumstances affecting achievability or timing.
What information should be more accessible?
James argues that information identifying the existence of relevant land contracts, where reflected through notices or restrictions on registered titles, should be more readily available to local authorities and planning and property platforms.
Does an indicative appraisal provide the final answer?
No. It initiates an assessment and helps identify the right questions. Detailed conclusions depend on site-specific costs, values, policy requirements and the actual terms of relevant agreements.