Anyone willing to talk about how land valuations are carried out?

Julia_Valentine

I did a bit of research about this a while back and ended up constantly getting reminded of inefficiency and even corruption in the property industry. I hope the people in this forum would be more likely to give me some positive news about how decisions are made. More specifically, I'd like to know about the way in which residential buildings are initially planned - from the very start of when one buys the land. I'm doing this in order to better word my company's product to that audience. My request is purely a market research request but I'd be grateful for someone who's open to testing the product's value proposition.

James_Dearsley2

A really interesting question there @Julia_Valentine and one that I have to say I know nothing about at all, I'm afraid. I have reached out to a few people to see if they can help you out here.

Richard_Wells

Hi Julia,

I’ve recently been speaking with this company - https://www.landattic.com/. I think they could be relevant. Let me know if you would like me to make an intro.

Julia_Valentine

@Richard_Wells thank you - that would be very helpful actually... I hadn't come across them before but looks like they'd be the experts on this topic!

Jonny_Britton1

Hi Julia

A while back we worked on a paper titled – Land: The State of Data and Information Availability. The full document is here: https://docs.google.com/document/d/1bl88Nbv_LLjQquvmbtYxWB4fjMn4uOFKM72fTCdu8bc/edit?usp=sharing , which covered land valuation a bit. It’s an interesting read but 12-page long, so here’s an overview.

Land Valuation
- The market in land is thinly traded and opaque with high transaction costs
- information costs are traditionally high as land is “heterogeneous, illiquid, lumpy and often complex”
- That means it takes a lot of resources to evaluate each site, and, once done, that work cannot reliably be reused on other sites, which is one of the key reasons for the slow pace of the industry

If we can improve the access to knowledge/data, the land market naturally becomes more efficient, as we’re reducing that information cost. New tech like ours (www.land.tech) -machine learning, digitised datasets, APIs etc - are starting to open up access to that knowledge.
Developers can identify and evaluate development opportunities more effectively, and at a lower cost than before.

That said, there’s still a long way to go. The industry is moving in the right direction, which is something but the speed at which it’s moving leaves a lot to be desired.

Ultimately, what all this means is that its hard to value a piece of land and so you need training or expertise to do it. That should change over time but needs a lot more information to be made available first and how far up to date local knowledge can be accessed at scale is not clear/ ridiculously hard to do.

Hope this helps...

Jonny

Julia_Valentine

Massively helpful, @Jonny_Britton1 - thank you! My next question is, after the land has been assessed, who gets involved next in terms of working out what could be built there?