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Residual land value calculator

What a site is worth, working backwards from what gets built on it

Land has no price of its own. It is worth what is left of the end value once the build, the fees, the finance, the planning obligations and the developer's profit have all been taken out, which is why two people can look at the same field and be a million pounds apart. This is that calculation, with every deduction visible, and the profit requirement stated rather than assumed.

For: A site to develop, with or without consent

Tell us what you are looking forAll calculators
What gets built
m²
Net saleable area. The gross internal area a builder prices runs about 15% above this once circulation, walls and plant are counted.
£
What a comparable new unit actually sold for nearby, not what one is listed at. This single number moves the land value more than anything else on the page.
m²
That is 0.59 acres, at a density of about 25 units a hectare.
Planning position
The principle is established and the detail is not. Reserved matters still cost time and money, and can still be refused.
What it costs to build
£
£1,800 to £2,200 a square metre for a budget specification, £2,200 to £2,800 mid range and £2,800 to £3,500 high end. London and the South East run 20% to 40% above that. Shell and core only: the externals are the next line.
%
Roads, drainage, services, boundaries, landscaping and the site strip. Ten to fifteen per cent on a straightforward site and much more on a sloping or backland one.
£
Demolition, contamination, piling, a diverted sewer, an attenuation tank, a substation, an archaeological dig. Nobody finds these before they buy unless they pay for a ground investigation, and every one of them comes straight off the land value.
%
Five per cent on a clean new build site, ten or more on a brownfield one.
%
Architect, engineer, planning consultant, quantity surveyor, building control, warranty and the monitoring surveyor the lender appoints. Eight to twelve per cent on a small scheme.
What the council takes
£
Charged per square metre of new floorspace and set by each charging authority, so it runs from nothing to over £200 a square metre. Check your council's charging schedule: it is published and it is non-negotiable.
£
Education, open space, highways and health contributions, negotiated rather than fixed. On a small scheme it can be nothing; on ten units and above it rarely is.
%
Usually triggered at ten units or above, and at a lower threshold in some authorities. Transfer to a registered provider is at roughly half open market value, which is why the threshold shapes so many schemes at nine units.
Profit and finance
%
Twenty per cent on gross development value is the RICS viability benchmark, and development lenders generally require 17.5% to 20%. It is not greed: it is the buffer that absorbs the build overrunning and the market moving, and a scheme priced below it has no room to be wrong.
mo
Purchase to the last sale completing, including the sales period after practical completion.
mo
%
0.65% to 0.90% a month for an established developer on a residential scheme, and up to 1.10% or above for higher leverage, less experience or a more complex structure.
%
Agent and marketing, plus about £1,200 a plot of legal costs on each sale.
What the site is worth as it stands£0With full consent the residual is £0, which is £0 a plot and 0.0% of the £1,710,000 end value. This site has outline consent, so a developer discounts that by 15% for planning risk, which is £0. That is £0 an acre. Add £0 of stamp duty on top of whatever you pay.
£1,710,000End value
£1,753,483Build and fees
£0Per plot
0.0%Land as % of GDV
£342,000Profit required
Build69%Fees6%Finance10%Profit15%
Working backwards from the end value
Gross development value£1,710,000
6 units at £285,000. That is £3,353 a square metre of saleable area.
Build cost£1,505,136
587 m² gross internal at £2,200 a square metre, plus 12% of externals and £60,000 of abnormals.
Contingency£112,885
Professional fees£135,462
Finance£240,891
Interest £188,287, arrangement £35,070, exit £17,535. Charged on a land advance outstanding for the whole term and a build tranche drawn in stages, which is why it is well below the £268,283 a flat calculation would show.
Selling costs£49,950
Developer's profit£342,000
20.0% of end value, which is 20.1% on cost. Twenty per cent on GDV is the RICS viability benchmark and roughly what a lender requires.
What is left for the land£0
Nothing. On these figures the scheme does not support any land value at all, which means either the end values are too low, the build cost is too high, or this is not the right scheme for this site.
Planning risk
Discount for the consent position−15%
The principle is established and the detail is not. Reserved matters still cost time and money, and can still be refused.
What to actually bid£0
Or structure it as an option or a conditional contract, so the price is agreed now and payable only on the permission being granted. That is how most land without consent actually changes hands, and it removes the risk this discount is pricing.
How wrong it can go
If end values come in 5% under£0
£0 off the land value, which is 0% of it. That is the residual method in one line: land is the thin residue of two large numbers, so a small move in either swings it hugely.
If the build comes in 10% over£0
£0 off the land value.
Both together£0
The site is worth nothing in that case, and the scheme loses money. If you have paid a land price based on the headline figure, that loss is yours.
Checks
Stamp duty on the land£0
Non-residential rates, which is what bare land attracts however many homes go on it.
Density25 units per hectare
Thirty to thirty five is typical for suburban housing, fifty and above for flats. A density well outside the local pattern is the commonest reason a scheme is refused.
Build cost against end value102.5%
Above about 60% and there is very little room for anything to go wrong, whatever the land value says.
Where these figures come from

The method. Residual land value is gross development value less build, fees, finance, contingency, planning obligations and the developer's required profit. It is the standard approach and it is notoriously sensitive to its inputs, which is why the downside cases above matter more than the headline.

Profit. RICS uses 20% on gross development value as the viability benchmark for a residential scheme, roughly 25% on cost. Development lenders generally require a projected profit of 17.5% to 20% on GDV.

Build costs. New build residential at 2026 prices: budget £1,800 to £2,200 a square metre, mid range £2,200 to £2,800, high end £2,800 to £3,500 and above. London and the South East run well above that.

Finance. Development finance runs 0.65% to 1.10% a month in 2026. Lenders advance up to 65% of GDV, occasionally 70%, and 85% to 90% of total cost, with the GDV cap taking precedence. The day one land advance is capped separately at 60% to 70% of site value. First-time developers face lower caps and higher rates.

Obligations. CIL is charged per square metre of new floorspace under each authority's published schedule and is payable on commencement. Section 106 contributions are negotiated. Affordable housing is usually triggered at ten units or above.

The residual method is the standard way land is valued and it is extremely sensitive to its inputs: a five per cent move in sales values or a ten per cent move in build cost swings the answer by far more, which is why the downside lines above are the ones to bid against. Abnormals are the commonest reason a site that appraised well loses money, and the only way to know about them before you commit is a ground investigation, which costs a few thousand pounds and is the best money on the page. Land without consent is normally bought on an option or a conditional contract rather than outright, so the price is agreed now and paid on the permission. An estimate, not a valuation and not advice.

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