Pricing planning risk into land offers
A site without consent is not worth its residual value — it is worth the residual discounted by the chance you never get to build it. Pricing that risk explicitly separates disciplined buyers from optimists.
The probability-weighted frame
Offer ceiling ≈ (consented residual value × probability of consent) − planning costs − time cost
A site with a £2.4M consented residual, a 60% realistic chance of consent, £150k of planning costs and a two-year carry does not support a £2.4M offer — the arithmetic lands nearer £1.2–1.3M unconditional, which is exactly why conditional structures exist.
Structures that move risk instead of price
- Subject-to-planning contracts: full-ish price, paid only on consent. The seller carries time; you carry planning spend.
- Options: a fee for the right to buy at an agreed price (or formula) if consent lands — cheapest exposure per site, and how strategic land is assembled.
- Overage: lower price now, top-up if a better consent emerges later. Bridges pricing gaps with sellers who believe in the upside.
Where the value evidence fits
Every structure above still needs the consented residual as its anchor — which needs GDV evidence: local indexed £/sqft, the measured new-build premium and realistic absorption. Planning judgement is its own expertise; the value side should never be the guessed half. Run the residual range first, then negotiate structure around the probability you and your planning consultant honestly assign.
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Start free trial →Data referenced in Threshold is displayed under the Open Government Licence (HM Land Registry Price Paid Data, EPC Register, ONS, UK HPI). All figures produced by Threshold are statistical estimates for site appraisal, not RICS valuations.