Benchmark Land Value and EUV+ Explained
Benchmark land value is the single most contested number in a financial viability assessment. Get it right and the rest of the appraisal has a fair foundation. Get it wrong — or try to inflate it — and the whole case falls over in front of the council’s independent reviewer.
This guide explains what benchmark land value is, how the “EUV+” method works, why the price you paid for the site isn’t the benchmark, and what the landmark Parkhurst Road judgment settled. For how this fits the wider assessment, see our complete guide to financial viability assessments in planning.
What is benchmark land value?
Benchmark land value (BLV) is the minimum land value a scheme’s residual value is tested against. If the residual lands below the benchmark, the scheme can’t viably deliver everything the local plan asks for. The Planning Practice Guidance sets the method: EUV+, meaning existing use value plus a premium to the landowner.
In other words, the BLV is the line in the sand. The appraisal works out what’s left after costs, planning obligations and a reasonable developer return (the residual), and compares it to the BLV. The relationship between those two numbers is what the whole viability argument turns on.
Existing use value (EUV), defined
EUV is the value of the land in its current use — and crucially, it excludes hope value.
Hope value is the uplift a buyer might pay in the hope of getting planning permission for something more valuable. The PPG deliberately strips that out of the EUV figure, because allowing it would let speculative land prices set the baseline for how much affordable housing a scheme has to deliver. EUV is grounded in what the site is worth as it stands today, not what someone hopes it could become.
The premium — the "plus" in EUV+
The premium is the minimum additional return needed to persuade a reasonable landowner to release the site for development.
It reflects the incentive a landowner needs to sell rather than hold. It’s informed by market evidence and the characteristics of the site, but it isn’t simply “whatever the market paid” — the premium has to be justified, and the reviewer will test it. A common point of confusion: the EUV+ landowner premium is a separate concept from the developer’s return (typically 15–20% of GDV under the PPG’s plan-making assumption). One rewards the landowner for selling; the other rewards the developer for taking the build risk.
Why the price you paid is NOT the benchmark
Because the PPG says so — explicitly. The price a developer actually paid for the site is not a valid benchmark land value.
This catches a lot of people out. If a developer overpays for a site — often because they assumed they’d secure a lower affordable-housing requirement — they can’t then turn around and use that inflated purchase price as the benchmark to justify delivering less affordable housing. The overpayment is the developer’s commercial risk, not something to be passed to the community. The benchmark has to reflect what the land is worth in policy-compliant terms, not what changed hands at auction.
The circularity problem — and Parkhurst Road
There’s a built-in trap: inflated land prices feed viability assessments, which justify less affordable housing, which supports higher land prices. The courts have called this out directly.
The landmark case is Parkhurst Road Ltd v Secretary of State [2018] EWHC 991 (Admin), decided by Holgate J. It concerned a former Territorial Army site in Islington, where the developer argued for a benchmark land value of around £11.9m (supporting roughly 10% affordable housing), while the council argued for around £6.75m (leaving headroom for about 34%).
The judgment confirmed two things that still shape viability today:
- EUV+ is the normal route. Market value and alternative use value will not, in most circumstances, be appropriate ways to set the benchmark — EUV+ should be adopted.
- The circularity problem is real and must be addressed. The court rejected adjusting comparable land values by assuming a fixed 50% affordable-housing proportion, finding it logically flawed because it let inflated land prices distort the affordable-housing outcome.
The practical takeaway: comparable land transactions can cross-check a benchmark, but they can’t replace a properly evidenced EUV+ calculation — especially where those comparables were themselves struck on optimistic planning assumptions.
When can alternative use value (AUV) feature?
Only in limited, well-evidenced circumstances. Where a site has a genuine, lawful alternative use that a reasonable owner would pursue, AUV may be relevant — but it has to be supported by real evidence (including that the alternative use is actually deliverable), not used as a back door to inflate the benchmark. In most cases, EUV+ remains the appropriate method.
How BLV interacts with the rest of the appraisal
The benchmark is one half of a comparison. The other half is the residual land value — what’s left once you subtract build costs, fees, finance, contingency, planning obligations and the developer’s return from the gross development value. If the residual clears the BLV, the scheme is viable at the obligations tested; if it doesn’t, the FVA quantifies how the obligations (usually affordable housing) would need to flex to bring the residual up to the benchmark.
Practical tips
- Evidence the EUV properly — current use, current condition, no hope value baked in.
- Justify the premium — explain the reasoning, don't just assert a number.
- Expect challenge — the council's reviewer will probe the BLV harder than any other input, so make it defensible from the outset.
If you need a benchmark land value established or an opposing FVA reviewed, see our financial viability assessment service or get in touch with our team.
Frequently asked questions
The minimum land value a scheme’s residual value is tested against in a financial viability assessment. It’s set using the EUV+ method — existing use value plus a landowner premium. If the residual falls below it, the scheme can’t viably deliver full policy obligations.
No. The PPG is explicit that the purchase price is not a valid benchmark land value. Overpaying for land is the developer’s commercial risk and can’t be used to justify reduced affordable housing.
Existing Use Value plus a premium. EUV is what the land is worth in its current use (excluding hope value); the premium is the minimum extra return needed to persuade a reasonable landowner to sell.
The extra a buyer might pay in anticipation of obtaining a more valuable planning permission. It’s deliberately excluded from existing use value when setting the benchmark land value.
That EUV+ should normally be used to set the benchmark land value (rather than market or alternative use value), and that the circularity of inflated land prices distorting affordable-housing outcomes must be addressed.
Need a benchmark land value established — or challenged?
Our RICS Registered Valuers establish defensible benchmark land values and review opposing FVAs across London and the South East — evidenced on EUV+ and built to stand up to the council’s reviewer.