Land values

Land holdings in normal circumstances provide a value to the individual or organisation in ownership of the land. However, in certain circumstances, previously developed land (PDL) can have a negative impact on a land owner’s finances through financial reporting and or as a result of the perception of risk associated with PDL. This impact on finances can directly influence those who can make decisions about land values including lenders, investors, iInsurers, property purchasers and regulators.

According to the CIRIA guide Land Contamination Management of Financial Risk (C578), simply the belief that a site is contaminated can affect land values as third parties question availability of financing, insurance costs, share value, and remediation costs. These concerns in turn may affect value due to uncertainty over remediation costs, future liability, lack of mortgageability, and increased risk of future liabilities should legislation change.

Similarly, a PDL site that has been neglected can be perceived as having a direct impact on adjoining land values due to impacts on local amenity and sense of place caused by the presence of unmaintained land and or unsightly security fencing. For many land holders, this can have a direct negative impact on a corporate brand/reputation.

Options for creating open space can therefore have direct benefits for land holders, where a suitable alternative use cannot be found either in the short or the long term. So, whilst from a monetary perspective the value of open space can be somewhat difficult to establish, indirect benefits can include:

  • the potential to uplift property values in areas adjoining/overlooking open spaces
  • resolving problems associated with blight
  • improving the attractiveness of a location to existing and new residents and or investors
  • resolving outstanding questions about contamination
  • reducing risk to new developments by managing surface water run off and flood risk and improvements to health and well being that can have, for example, knock on benefits in terms of savings for the National Health Service.

Furthermore, the cost of an open space project can be substantially lower than might be expected. For example, simple planting of grass and flowers and creating wildlife habitats can create attractive low maintenance spaces and enhance values (where valued habitats are not created).