What is Existing Use Value?
Existing use value is the value of land based on its current lawful use. For most farmland, this means its value as agricultural land, taking account of quality, location, access, size, productivity, tenancy position and market demand.
Development value is different. It reflects the value of land for a higher-value use, such as housing, employment or mixed-use development. This value normally depends on planning permission or a realistic prospect of planning permission.
Between these two positions sits hope value. This is the additional value that may be paid where development is not guaranteed but there is a credible possibility of future planning success.
Existing Use Value, Hope Value and Development Value Explained
When farmers ask whether land is worth more than agricultural value, the answer usually depends on where the land sits on the value spectrum. At one end is existing use value, where the land is assessed for its current lawful farming use. At the other end is full development value, where land benefits from planning permission or is otherwise capable of being sold to a developer for a higher-value use.
Between these positions is hope value or strategic value. This can arise where land does not yet have planning permission, but there is a credible prospect that planning policy, housing need, settlement growth, infrastructure, Local Plan review work or developer demand could create future development potential.
What Are the Main Types of Land Value?
Existing Use Value
Existing Use Value (EUV) is the value of land based on its current lawful use. For most farmland, this means its value as agricultural land, taking account of factors such as land quality, location, access, size, productivity, tenancy arrangements and prevailing market demand. Agricultural land values can vary significantly depending on the type of farming operation, the quality of the soil, the availability of water, access to the public highway and local market conditions. Existing Use Value reflects what a purchaser would typically pay for the land in its current use, without taking account of any future development potential.
Hope Value
Between Existing Use Value and Development Value sits Hope Value. Hope value represents the additional amount a purchaser may be willing to pay where planning permission has not yet been secured, but there is a credible possibility that the land could obtain planning permission in the future. Hope value commonly arises where land is located on the edge of a settlement, has been promoted through a Local Plan process, has been submitted through a Call for Sites exercise, or benefits from other indicators that suggest future development potential. The stronger the prospect of future planning success, the greater the level of hope value that may be reflected in the land's price.
Development Value
Development Value is the value of land for a higher-value use, such as residential, commercial, employment or mixed-use development. This value is often substantially higher than agricultural value and is usually dependent on planning permission being granted or there being a realistic prospect of planning permission being obtained. The difference between existing use value and development value can be considerable. Agricultural land may be worth several thousand pounds per acre, whereas land with residential planning permission can be worth many times that amount depending on location, density and market conditions.
What Can Increase Land from Agricultural Value to Development Value?
Agricultural land does not become development land simply because a landowner wants to sell it. The uplift normally comes from a combination of planning policy support, market demand, technical deliverability and a clear development route.
For example, a field adjoining a village with highway access, nearby services and limited constraints may have a stronger prospect than isolated countryside land. However, even land outside a settlement boundary may become more valuable if the council is reviewing its Local Plan, seeking new housing allocations or facing a shortage of deliverable housing land.
The strongest opportunities are usually identified early, before the land is placed on the open market. This allows the landowner to consider whether a direct sale, promotion agreement, option agreement, overage clause or planning application strategy is most likely to maximise value.
What Drives Land Value?
Land adjoining an existing town, village or settlement edge
A council Local Plan review, Call for Sites or site allocation process
Housing land supply pressure or unmet housing need
Safe access, road frontage and realistic visibility splays
Limited flood risk, ecology, heritage or landscape constraints
Developer demand for residential, employment or mixed-use land
Why Farmers Should Not Rely on Agricultural Value Alone
A farm valuation based only on agricultural value may overlook hidden development potential. This is particularly important where a farmer is considering selling a field, part of a farm, an edge-of-settlement parcel, a redundant yard, land near housing, or land that may be relevant to a council’s future growth strategy.
Key Considerations for Farmers:
Selling too early can reduce value
If land is sold before its planning potential is understood, a buyer may benefit from the uplift later. This can sometimes be addressed through overage, but overage needs careful drafting and may not always produce the same outcome as securing planning or promoting the site before sale.
Planning strategy can improve negotiating position
A landowner who understands the Local Plan position, constraints, access options and likely developer interest is usually in a stronger position to negotiate with promoters, housebuilders, option holders or land buyers.
Only part of a farm may be affected
Development potential often relates to a specific field, gateway, paddock, yard or settlement-edge parcel rather than the whole farm. A targeted assessment can identify whether a smaller area has a much higher value than the wider agricultural holding.
The best route depends on risk and timescale
Some land may suit a direct sale, while other land may benefit from a promotion agreement, Local Plan submission or planning application. The right route depends on policy support, cost, likely timescale, landowner objectives and appetite for risk.
Why Understanding Land Value is Important
The value attributed to land can influence a wide range of decisions, from succession planning and refinancing through to strategic land promotion and future investment. Landowners who understand the factors driving value are often better placed to identify opportunities and avoid making decisions based solely on agricultural market prices.
In many cases, land that appears to have modest agricultural value may warrant further investigation due to its location, planning context or long-term development prospects. Equally, some sites may face significant planning constraints that limit future value growth despite being located close to existing settlements.
Understanding how existing use value, hope value and development value interact can help landowners make informed decisions about their assets and develop an appropriate long-term strategy for the land.
The right planning strategy can make a major difference to the value achieved.
How Existing Use Value and Development Value Affect Sale Strategy
The value basis used for a sale can influence the structure of the transaction. A sale at existing use value may be simple, but it may not capture future planning uplift. A sale with planning permission may produce a higher price, but it can take time and technical work to get there.
For many farmers, the practical question is not just “what is my land worth today?” but “what could it be worth with the right planning strategy?”
Immediate sale
Suitable where the landowner wants speed and certainty, but it may not secure the full development value if planning potential has not been tested.
Sale with overage
Can allow the farmer to sell now while retaining a right to a future payment if planning permission or development uplift occurs.
Promotion agreement
A promoter funds and manages the planning strategy, usually receiving a fee from sale proceeds if planning success is achieved.
Planning before sale
Securing planning permission before sale can create competition from developers and may help maximise the final land value.
Questions to Ask Before Selling Farmland
Before accepting an offer based on agricultural value, it is worth asking whether the land has any current or future planning value. Even a preliminary assessment can help identify whether more detailed planning, valuation or promotion advice is justified.
Is the land near a settlement?
Land adjoining a village or town can sometimes have stronger development prospects than isolated farmland.
Is the Local Plan being reviewed?
Local Plan reviews and Call for Sites exercises can create opportunities for land to be promoted.
Could access be achieved?
Highway access, visibility and road capacity are often central to development value.
Are there major constraints?
Flood risk, ecology, heritage, trees, landscape sensitivity and utilities can all affect value.
Is there developer demand?
Demand from housebuilders, promoters or commercial developers can influence price and sale route.
Should future uplift be protected?
Overage, restrictions and carefully structured agreements may help protect future value.
How Value My Land Can Help
We help farmers compare existing agricultural value against potential development value. We assess the planning position, identify whether hope value may exist, and explain practical routes for maximising the value of land before sale.
How We Help Farmers Maximise Land Value
Related Guides
Explore how existing use value compares with development value, and discover the planning, market and site factors that can increase what farmland is worth. These practical guides cover agricultural land valuation, hope value, development potential, land promotion and strategies for maximising or realising a farm's development value.
How Much Is My Farm Worth?
Learn how location, land quality, buildings, access and development prospects influence a farm valuation.
Click hereAgricultural Land Value Guide
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Click hereCould My Farm Be Worth More Than Agricultural Value?
Discover when planning prospects and development demand could make a farm worth more than its existing agricultural use.
Click hereHope Value Explained
Understand how the possibility of future planning permission can add hope value to agricultural land.
Click hereShould I Sell My Farmland Now or Wait?
Compare the planning, market and farm-business factors that may influence whether to sell farmland now or retain it for a future opportunity.
Click hereAgricultural Land Development Potential
Review the planning, location, access and technical factors that may give agricultural land realistic development potential.
Click hereWhat Is Land Promotion?
See how a land promoter can pursue Local Plan allocation and planning permission to unlock development value.
Click hereMaximising the Value of Farmland
Explore practical strategies for improving a farm's planning prospects and achieving its strongest possible value.
Click hereCan I Sell My Farm for Development?
Understand the options for selling farmland with development potential and preparing it for the development market.
Click hereFrequently Asked Questions
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