Glossary
Hope value
The premium land carries over its current use for the chance of future planning permission.
What it means
Hope value is what buyers will pay above a site's existing use value, such as farmland, because it might get planning permission. It rises as the odds improve: a site next to a village boundary is worth more than one in open countryside, and a site allocated in a local plan more again. If you pay full hope value, the seller has already taken most of the planning gain, which is why options and promotion agreements exist.
Worked example
ExampleA two-acre paddock on a village edge.
- Agricultural value
- £12,000 an acre = £24,000
- Asking with hope value
- £60,000
- Value with planning
- £744,000
Paying £36,000 of hope value is a bet that planning is likely. If it fails, that premium is lost.
Information, not advice. Example figures are fictional and for illustration only.