Marriage value and site assembly in a viability appraisal

Assembling a site from several ownerships adds real cost and real risk to a scheme, and almost none of it belongs in the benchmark land value. National viability guidance is blunt about this: the price paid for land is not a justification for failing to comply with development plan policies, and benchmark land value is established from existing use value plus an appropriate premium rather than from the transaction history. So an assembly premium, a ransom payment or the marriage value you created by putting four titles together is not something the planning system is obliged to absorb.

That is the hard part of the conversation with a client who has spent three years and a lot of money buying out a yard, a pair of houses and a strip of access land. The costs are genuine. The question is which line of the appraisal they belong on, and that distinction is what a reviewer will test first.

Where assembly costs actually sit

Separate three things that get conflated.

Benchmark land value is a policy construct. It is the value that has to be left in the land for a reasonable landowner to release it, assessed as existing use value plus a premium, informed by market evidence and by the policy requirements of the plan. It is assessed per site, not per transaction.

The purchase price is a fact about the deal. It may be above or below benchmark land value, and where it is above, the gap is the developer's commercial risk rather than a planning cost.

Transaction and assembly costs are real costs of delivering the scheme, and some of them properly belong in the appraisal as costs: stamp duty land tax, agents' and legal fees on acquisition, surveys, and the finance cost of holding land through the assembly period. Those are not land value. They are costs of acquiring the land at whatever value is agreed.

Marriage value is the uplift created when separate interests combine to be worth more than the sum of the parts. It is a valuation concept, and in a planning appraisal it is a reason the land is worth more, not a cost to be recovered. A Viability Assessment that treats created marriage value as an input cost has reversed the logic, and a reviewer will say so in the first paragraph of their response. That assessment needs a suitably qualified author following the national guidance and the relevant professional standard, and professional review is strongly advised.

Acquisition costs, stated honestly

The schedule a reviewer wants is title by title, and it is short:

• Purchase price, date, and whether the transaction is at arm's length between unconnected parties.
• Stamp duty land tax, calculated at the rate applicable to that transaction rather than averaged across the assembly.
• Legal and agency fees, with the basis stated.
• Option or promotion fees paid, and any promoter's share of net receipts.
• Overage or clawback obligations, with the trigger and the share, because an overage payable on planning permission behaves like a cost but is often omitted.
• Holding costs and finance on the land from acquisition to the appraisal date.

Two habits make this credible. Show each title separately, with its own existing use evidence, rather than presenting one blended figure. And where a transaction was between connected parties, say so, because a reviewer who discovers it independently discounts the whole submission.

Ransom strips and the access premium

The site with no access is the classic assembly problem, and the valuation approach to it is long established. Where one owner controls the only route to the development land, the valuation convention derived from the 1961 Lands Tribunal decision in Stokes v Cambridge apportions a share of the development value to the owner of the access, and shares of around a third have been widely cited since.

Three points follow for the appraisal.

The premium paid for the access strip is a transfer of development value between landowners. It does not change what the completed scheme is worth and it does not change the construction cost, so it cannot reduce the policy contributions the scheme can support unless the benchmark itself is wrong.

The benchmark land value for the ransom strip is its own existing use value plus a premium, which for a verge or a yard is modest. Adding the strip's purchase price into the land cost line and then also claiming the premium in the benchmark is double counting, and it is the single most common error in assembly appraisals.

And the premium is avoidable more often than people assume. Check whether a right of way already exists, whether a highway has been dedicated by long use, whether the adopted highway extends further than the record suggests, and whether an alternative access could be engineered. Three months of title and highway record work is usually a better investment than a ransom negotiation.

Timing risk in a phased assembly

A phased assembly carries risks a single purchase does not, and the appraisal has to put them somewhere visible.

1. Hold-out risk. One owner refusing to sell can stop the scheme or force a redesign, and the appraisal should show the scheme that is deliverable on land already controlled alongside the full scheme.
2. Holding cost. Land bought in year one and developed in year five carries five years of finance, and the compounding is material at current rates.
3. Planning risk. Policy moves. A scheme assembled against one local plan may be determined against its successor, with different affordable housing and carbon requirements.
4. Cost inflation. Build cost indices and the appraisal date have to be consistent, and a cost plan two years old needs restating rather than indexing by assertion.
5. Vacant possession. Tenancies, licences, security of tenure and relocation costs all sit on the critical path, and an occupied industrial unit with a protected tenancy is a programme item, not a line in the legal fees.

Where assembly risk is real and quantified, the honest response is usually a review mechanism rather than a reduced contribution fixed at permission. The mechanics of those clauses are set out in affordable housing review mechanisms in section 106, and they give both sides a route out of arguing about a forecast.

Benchmark land value across several titles

Assess each title on its own existing use, then aggregate. A yard in industrial use, two tenanted houses and a strip of amenity land have three different existing use values and three different appropriate premiums, and a single blended figure hides all of it.

What the evidence looks like per title:

• For an income producing property, the tenancy schedule, the passing rent, the lease terms and a yield supported by comparable transactions.
• For residential, comparable sales with dates and adjustments, not asking prices.
• For agricultural or amenity land, transactional evidence for the same use in the same area.
• For a ransom strip, its existing use value, with the premium argued separately and explicitly.

Then apply the premium, and justify it by reference to the plan's policy requirements and to market evidence rather than to what the vendor wanted. Landowner expectation is not a benchmark, and a figure derived from the price paid is circular reasoning that inspectors see through quickly. How that scrutiny plays out is covered in when an inspector reopens viability at appeal.

Presenting it so the review is short

Viability evidence is expected to be publicly available, with redaction treated as exceptional and justified rather than routine. Write the assessment on the basis that the objectors will read it.

What shortens a review:

• A title plan with each ownership numbered, cross referenced to the schedule and to the Land Registry titles.
• One table of acquisition facts and one table of benchmark land value, kept separate so that nobody has to work out which is which.
• Every input dated, with its source named.
• A sensitivity analysis on the two or three inputs that actually move the answer, usually sales values, build costs and finance rate, rather than a table of twenty variables moved by 5 per cent each.
• The contracts and option agreements supplied, or a clear statement of what has been withheld and why.
• A short section headed to deal with assembly, setting out the costs, the risks and the treatment, so the reviewer does not have to look for it.

And accept that some of the assembly cost is simply not recoverable through reduced policy contributions. Saying so in the assessment, and arguing instead for a review mechanism or a phased obligation, is a stronger position than an appraisal that buries a ransom payment in the land cost line and hopes.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. To see which documents a scheme is likely to need, enter your postcode on PlanScope.