Unimproved site-only location values

When you are thinking about buying a house, you don't just look at the bricks and mortar (and the terms of the lease if you are buying a flat), you look at 'the location' (glossing over the bubble element that has made up such a large fraction of house prices in recent years, and the 'scarcity' element that is very difficult to quantify).

We are familiar with lots of things that sales particulars mention, such as:

- Only ... minutes walk/drive from the station, with a ... minute journey to [major city]
- Good transport links
- Within the catchment area of [a good] state school
- Close to [shops/playground/forest]
- With unspoiled views over [fields/beach/forest] or in a conservation area
- Planning permission has been granted for ...

There are other things not usually mentioned on sales particulars that are just as important, of course, such as quiet neighbourhood, low crime, clean well-lit streets, regularity of refuse collection, how savage the parking restrictions are, does the house/flat have broadband connection etc. Then there a lot of things that aren't mentioned but which you still take into account:

- High crime areas, close to sink estate, gypsy camp
- Within earshot of noisy trunk road, railway line or under busy flight-path
- Within smelling distance of sewage works or the blast zone of a gasometer*
- That awful family three doors down who have a front garden full of broken furniture and park their clapped out cars on the street or a boarded up/vandalised property round the corner.

All these things, and many more besides (the are also specific lists for different types of business, such as retail, industrial, power stations etc but let's keep this simple) are what you, the prospective purchaser, are prepared to pay for in addition to (or would subtract from) the value of the actual physical building.

But remember, most of these factors are completely beyond the control of the owner of that particular house or flat, so while it seems perfectly reasonable that a future owner/purchaser pays for the benefits (minus drawbacks) of any particular location, it does beg the question of whether the current owner/vendor purchaser should be entitled to collect the full value thereof, bearing in mind how little he or she did to create the benefits and/or cause the drawbacks specific to that particular location.

* Remembering always that being on mains water or gas adds more to the value of the homes that are connected, than it detracts from the value of homes in affected areas, this is a positive sum game.