Land value: an example
In October, 2024, an article in The BusinessDesk reported a deal to build 228 homes on 28.54 acres of land in Leicestershire. The developer was Vistry Group whose brands include Bovis, Linden and Countryside Homes.
Hawkins and Harrison of Ashby de la Zouch produced the marketing brochure.
The land is a greenfield site off Barnards Drive, Sileby, Leics. and according to the title document at the Land Registry the freeholder is Mark Barber of Highgate Farm, Sileby (shown as Highgate Lodge on the map.)
From £319,000 to £63,000,000
The title for 28.54 acres shows a value of £319,000 as of 19/12/2017 - £11,177 per acre.
The Gross Development Value (GDV) of the development when complete was £63 million.
The title also shows that the property cannot be disposed of without the written consent of Gladman Developments of Congleton, Cheshire. Gladman defines itself as:
“the UK’s most active and successful land promoter. In 2022 we joined Barratt Developments PLC Group giving us greater flexibility in our approach and enhancing financial security.”
Barratt Developments PLC is part of Barratt Redrow PLC.
Planning permission requires 30% of the homes to be “affordable” and 12 acres to be set aside for open space. The density of the built-up area is 13.8 homes per acre.
Notes:
According to the Land Registry title the land has not changed hands. We therefore don’t know how much the current freeholder has received for the land When payment is received the freeholder will be liable for Capital Gains Tax which could be as low as 10%. The complexity of these deals, to minimise costs and tax, is clear from this article.
There would have been considerable costs involved in drawing up and progressing the planning application and Gladman Developments would have charged a fee - probably covered in a private contract with the freeholder.
In addition LAs will have requested contributions towards a variety of services including schools, roads, and other amenities. Some of these may be found by looking at the documents associated with application reference P/21/0738/2 with Charnwood Borough Council.
Capturing land value
Land Value Tax captures the increase in land value at each stage before development is complete - as long as each change in value is recorded by the Valuation Office Agency and/or by the Land Registry.
If the land had been zoned for potential development its real value would have been increased - so its LVT due would increase.
even if the land was not zoned, it has “hope” value because it is close to an existing settlement. This would have increased its value over basic agricultural land so the LVT would increase.
the moment Mark Barber, the freeholder, enlisted the support of Gladman Developments, the “land promoter”, the value would have increased so the LVT would increase.
the moment outline planning permission was granted by Charnwood Borough Council the value would have increased so the LVT would increase.
the moment full planning permission was granted by Charnwood Borough Council under reference P/21/0738/2 the value would have increased so the LVT would increase.
at this point the freeholder at the time (possibly Mark Barber or Vistry) would be paying the full rate of LVT so there would be every incentive to complete the development - there would be no point using land banking in the hope that the value would go up even further.
At the time of writing this article (February, 2025) we don’t know if development has started.
Note: the information provided above is from publicly available documents over which we have no control. We have provided links to those documents and we are happy to change the contents of this page if anything we have written is inaccurate.