Benchmark land value where the site already has consent
Where a site carries an unimplemented permission, the benchmark land value argument turns on whether that permission could actually be built today. Often it could not.
An extant planning permission on the site does not by itself lift the benchmark land value. Benchmark land value with an existing consent still has to be derived from existing use value plus a premium, unless the consented scheme can be shown to be implementable and to generate a residual land value above that figure today. A permission for a scheme that would lose money at current build costs is worth nothing above existing use value, however impressive the consented drawings are.
That is the argument reviewers make and it is usually right. Which means the applicant's job is to show the consent is real, deliverable and financially positive, rather than to assert that it exists.
Why an existing consent complicates the benchmark
Planning Practice Guidance directs benchmark land value to existing use value plus a premium to the landowner, and allows alternative use value to inform the figure where the alternative use accords with development plan policy and could be implemented. An unimplemented permission for a different scheme is a form of alternative use value, and it has to meet the same conditions.
The complication is circularity. The land was probably bought at a price reflecting the consent. Guidance is clear that the price paid is not the benchmark, because a purchaser who paid too much cannot pass the consequence to the authority by reducing the affordable housing. So the consent has to be valued on its own merits rather than by reference to the transaction.
Two further problems attach. A consented scheme was appraised on the costs and values of its own date, which may be three years ago. And the consented scheme carried its own obligations, which have to be deducted before any residual is compared with anything.
Whether the consent is implementable
Work through this list before valuing anything. If the consent fails on any of them, it is hope value and it does not enter the benchmark.
- Time. Does the permission still have time to run under its implementation condition, and if it has been implemented in part, has that implementation been lawful and material?
- Conditions that bite before work starts. Are they capable of discharge, and have any been discharged? A condition requiring an off-site highway works agreement nobody has negotiated is a real obstacle.
- The section 106. Is it executed, is it binding on the current owner, and are its obligations still deliverable?
- Land and rights. Does the applicant control every part of the red line, and every access, easement and outfall the consented scheme depends on?
- Physical feasibility today. Has the ground investigation, flood modelling or protected species position changed since consent so that the scheme could not now be built as drawn?
- Regulatory change. Would the consented scheme comply with the Building Regulations as they now stand, or would it need redesign?
Point six matters more than it used to. A scheme consented against a previous fabric standard, or a residential building designed with a single stair near the current threshold, may not be buildable in the form permitted. That is a material answer to a benchmark argument, and it is one the reviewer may not think of.
Valuing the permitted scheme
If the consent survives that screening, value it as a residual. Appraise the consented scheme at today's costs and today's values, deduct the obligations it carried, apply the profit the market would require for that scheme, and see what land value falls out.
| Input | Basis to use |
|---|---|
| Gross development value | Current values for the consented mix and specification |
| Build cost | Current cost data for the consented form, with abnormals |
| Obligations | The obligations in the executed agreement for that permission |
| Profit | The return a purchaser would require for that scheme's risk |
| Timing and finance | A realistic programme from today, not from the consent date |
Three outcomes are possible and all three are useful. The residual exceeds existing use value plus a premium, in which case it informs the benchmark. The residual is below it, in which case existing use value plus a premium stands and the consent is irrelevant. Or the residual is negative, which is a powerful argument that the consent has no value at all and should be said plainly.
Do not mix bases. A consented scheme valued on today's sales values and yesterday's build costs produces a land value nobody will accept, and it undermines the credibility of the rest of the appraisal.
Alternative use value and its limits
Alternative use value is not confined to consented schemes. It can rest on a use that could plainly obtain permission, but guidance sets conditions: the alternative must accord with development plan policy, it must be capable of being implemented, and it must be appraised on a policy compliant basis including the obligations that use would attract.
That last condition removes most of the aggressive arguments. An office scheme presented as the alternative use has to carry the obligations, the carbon requirements and the design standards an office scheme would actually be required to meet. Appraise it properly and it often produces less than the claimant expected.
Where the alternative use is one the plan does not support, it is not an alternative use value at all. It is speculation.
Hope value and why it is excluded
Hope value is the premium a purchaser pays for the chance of a more valuable permission in future. It is excluded from benchmark land value for a simple reason: including it would let the market price of that hope displace the policy requirements the plan imposes, which inverts the plan-led system.
In practice hope value enters appraisals dressed as something else. A benchmark supported only by comparable transactions of unconsented land in the same area is usually a hope value benchmark, because those transactions embed the same expectation. Comparable evidence is still useful, but it has to be interrogated: what was consented, what obligations applied, and what the purchaser assumed.
Evidence a reviewer will want
Supply the documents rather than the conclusions.
- The decision notice and the approved drawings for the extant permission.
- The executed section 106 agreement and any deed of variation.
- The discharge of conditions history, showing what has and has not been approved.
- Evidence of any lawful implementation, and legal advice on whether the permission remains live.
- A current appraisal of the consented scheme on the bases set out above.
- Title information showing control of the red line and the rights the scheme relies on.
- The existing use value derivation and the reasoning for the premium.
The existing use value work is the part applicants skimp on, and it is the part the reviewer's valuer is most comfortable challenging. Give it the same care as the residual. Where the site has an employment use, the release argument runs alongside the valuation argument and the evidence expected is set out in the note on employment land release.
Presenting the derivation transparently
Show all three figures in one table: existing use value plus premium, the consented scheme residual, and any alternative use value relied on. State which is adopted, why, and what happens to the residual if the adopted figure moves by ten per cent either way.
That sensitivity is the most persuasive part of the submission. A benchmark presented as a single number invites a single counter-number. A benchmark presented with its sensitivity invites a conversation about which assumption is doing the work, which is the conversation that settles cases.
The whole derivation belongs in the Viability Assessment, with the affordable housing consequence carried through to the Affordable Housing Statement so the two documents cannot contradict each other. Where the matter goes further, the treatment of confidentiality and of competing appraisals at appeal is covered in the note on viability at appeal.
See PlanScope pricing if you want a structured first draft of the supporting statements while the valuation work is being finalised.
This is general guidance, not legal advice. For specialist technical reports, qualified professional input may be required. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
Does an extant planning permission raise the benchmark land value?
Only if the permission is implementable and the consented scheme produces a residual land value above existing use value plus a premium when appraised at today's costs and values. A permission that would now lose money, or that cannot be built because conditions cannot be discharged, adds nothing to the benchmark.
Can we use the price we paid for the land as the benchmark?
No. Planning Practice Guidance is clear that the price paid is not the benchmark, because a purchaser who overpaid cannot transfer the consequence to the authority by reducing policy requirements. The price paid can be evidence of market behaviour, but the benchmark has to be derived from existing use value plus a premium or a qualifying alternative use value.
What is alternative use value?
The value of the land for a use other than the one proposed, which can inform the benchmark where that use accords with development plan policy, could be implemented, and is appraised on a policy compliant basis including the obligations it would attract. Appraised properly, alternative uses often produce less than applicants expect.
Why is hope value excluded?
Because it is the price of an expectation of future permission, and allowing it into the benchmark would let market expectations displace the policy requirements of the adopted plan. Comparable transactions of unconsented land usually embed hope value, so comparable evidence has to be interrogated rather than adopted at face value.
What if the consented scheme has a negative residual?
Say so plainly. A negative residual means the permission has no value above existing use value, which supports a benchmark derived from existing use value plus a premium. It is a stronger position than a strained argument that the consent is worth something, and a reviewer with a valuation background will recognise it.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.