How To Know The Worth Of An Acre?

How To Know The Worth Of An Acre

How much is an acre of land worth? It seems like a fairly simple question, but the answer is not always clearcut and straightforward. The value of land depends on a myriad of factors, so trying to figure it out can be a bit crazy-making! At the same time, whether you are buying or selling, or have land you want to value in case you would like to sell at some point or secure financing, it is important to understand the nuances to arrive at a solid estimate.

In this guide, we will cover important questions, such as:

  • What Is an Acre?
  • Why Does Size Matter?
  • How Much Is an Acre of Land Worth in the UK?
  • What Factors Influence the Value of an Acre?

Let’s find your answers.

What Is an Acre?

The word “acre” comes from the Old English word for the field, and in the Middle Ages, it referred to the amount of land that could be ploughed in one day by one man and a team of oxen. It wasn’t a standard unit of measurement to be sure! For example, a flat field of a certain measurement could be ploughed much faster than hilly or uneven terrain of the same size. Still, we like the origins of the word! And it remains in use to this day.

These days, the measurement is a bit more standard. An acre measures 43,560 square feet; when describing an acre of farmland, you will notice that it is measured as 660 feet long by 66 feet wide. It can be hard to picture, so visualize 16 tennis courts, a car park that can accommodate 150 cars or a housing development with 18 homes. That will give you an idea of the size of an acre and help you conceptualize how big it is in the grand scheme of things.

Why Does Size Matter?

Whether you are interested in purchasing a house with land or a plot to develop or you own such a property, it is important to know how much you’ve got and what, exactly, an acre is. For example, if you have a piece of land you would love to build on, you need to figure out the value of an acre as you go through the mortgage process. Say that you are approved for a loan of £300,000 and the land is valued at £100,000. This means that the land alone would account for one-third of your total budget. (We will discuss factors that influence price momentarily.)

Likewise, if you are selling, you know that the structure is worth £X but the land is worth £Y. It can help you set a reasonable asking price. In some cases, the land may be worth more than the house, and this is important to know so you do not set your price too low.

How Much Is 1 Acre of Land Worth?

This is where the topic can get tricky. “It depends” is a frustrating answer – but it is nonetheless true in this case. In the UK, an acre of farmland typically goes for between £12,000 and £15,000. This may be more or less depending on the area and other variables. It is not unheard of to pay £25,000 or more for an acre, especially when the land is contiguous to your house. You could end up paying as much as £50,000 because it will add value to your home.

As you can see, this is a wide range! The amount of land you are interested in buying (or which you own) also plays a role. It is typically more expensive to buy a single acre or two compared to large parcels. Why? It is difficult to find someone to purchase 100 acres for £600,000, for example. It is much easier to find several people who will buy an acre or two for £25,000 or so. Yes, the price is much higher, but it is more accessible to more people.

So if you’re asking “how much is 2 acres of land worth in the UK,” the answer is twice as much as one acre! But as you buy larger parcels, the price usually decreases. What about a smaller plot? How much is half an acre of land worth in the UK? This too is difficult to answer with finality because it depends greatly on many factors, such as location. A half acre contiguous to your home in a desirable neighbourhood can be more expensive than two acres of farmland elsewhere. This is why it is so important to learn about the variables that influence price and value.

Next, we will do just that.

What Factors Influence the Value of an Acre?

As discussed, the value of an acre can vary wildly, from just £6000 – £7000 to upwards of £50,000. Why? What is at play here? Several factors influence the price and value of land:

  • Proximity to utilities. If the land has hook-ups for water, sewer and electricity, for example, the price will be higher. If those utilities can be installed quickly and easily, this too will push the price up. Land without these features fetch a lower price but buyers will end up paying quite a bit to have utilities installed. Depending on the terrain and location, this can be very expensive.
  • Existing structures. If you buy farm acreage, for example, there may be a functional barn and/or stables. If they are in good condition, this will increase the value of the land in most cases. On the other hand, if the condition is not good, it can have a detrimental impact on value, all other factors considered. Sometimes, the land is worth more than anything that stands on it.
  • Supply and demand. Good old supply and demand; we see this in the regular housing market. Recently, we have seen incredibly high demand with lower levels of supply, thus driving the prices for homes up. The same is true in terms of land. As an area becomes more desirable, the land becomes more scarce – and more expensive.
  • Typically, land that is located near major cities or along the coast is priced higher than land in rural or suburban areas. For example, if you want to buy a smallholding farm with a home on an acre near London, you are going to find it difficult to find it for less than £1 million. You could have a 100-acre farm with a house in the countryside for that or less.
  • Buying land in a thriving area or one that is up and coming is more expensive. New businesses, workers, families and others are coming in, and they’ll need housing, schools, medical centres, parks and other amenities. Thus, the land increases in value and in scarcity. On the other hand, if the local economy takes a blow and a mass exodus occurs, the same land could be much less valuable.
  • Environment and topography. Value is also affected by environmental factors, such as vulnerability to flooding or whether it is in close proximity to chemical plants, etc. In terms of topography, land with great views, good drainage, level surfaces, mature trees, etc., are valued higher.
  • In this case, we mean the types of structures surrounding the land. For example, an acre of land in an industrial area is usually less expensive than an acre of land in a residential or recreational area.
  • Intended use. How you will use the land also plays a role in its value. For example, an acre intended for housing is valued differently from one that will be used for farming.

How much is 1 acre of land worth in the UK? As you can see, this is a highly complex question! The answer involves examining the variables involved. You must also take into account the current market. Post-COVID, we are seeing an increase in the value of land, and this is true of farmland too, which had been a less expensive investment than urban land. For example, the average price for an acre of arable land increased by 2% from 2021 to 2022, while the average price for an acre of pasture land increased by 3% in that same period.

This is just to give you a look at how economic forces can influence the price of an acre. The land will nearly always have value; how much depends on a remarkable variety of factors that are ever-changing.

How can you determine the value of a piece of land?

You look at all of these elements, and you may also have to conduct more in-depth research on soil conditions, environmental factors, improvements on the land (e.g. drainage systems), restrictions, access and searches on titles, deeds etc. This can be overwhelming, especially if one does not have a background in land transactions and/or development. It is recommended that you work with an estate agent that specialises in these types of properties. They can advise as to how to proceed, how to access the documents and records you need and so on.

Buying and Selling Land In The UK

When you are interested in buying or selling land, it is important to know that it can be quite different to buying or selling a house. More typically, you will be interacting with or competing with developers who have extensive experience – and often, much larger budgets. It can be a high-stakes game, and it is essential that you are prepared.

Learning about the value of an acre is an important first step. Where do you go from here? We recommend that you work with a professional who is well versed in land transactions. As mentioned, they can help you navigate the process with more ease and confidence.

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