Where the Money Goes When a Field Becomes Homes, Line by Line

Because a figure like that is taken from the top of the sum, where the money from selling the finished homes sits, and not from the bottom, where the land sits. A headline figure per acre is a gross number. It is quoted before a single house is built, before the affordable homes are handed to a housing association at a discount, and before the council's charges, the new levies and the builder's return have been paid. Nobody is handed it as a cheque.

Chris Tinker, chairman of major projects at the housebuilder Crest Nicholson, made the same point in September 2019, at a Labour Party conference fringe meeting in Brighton run by the Town and Country Planning Association. As Housing Today reported, he warned that no farmer should be under any illusion that winning planning permission means pocketing the headline figure per acre. He then listed the costs that come out first, which we return to below.

Land with planning permission for homes is worth far more than farmland. How the three values of a field compare (what it is worth today, the hope of planning, and the value once permission exists) is the subject of our guide on how the price for your land is worked out. This page follows the money from the price a buyer pays for a new home, line by line, to the small share that is left over at the end.

The proper name for the sales total is the gross development value, usually shortened to GDV. Every line on this page is shown as a share of it.

The government's planning practice guidance on viability is what councils and their valuers work from. It lists the costs that a scheme must be tested against, and they are the lines of the stack on this page:

• Build costs, taken from the Building Cost Information Service, BCIS, which is part of the Royal Institution of Chartered Surveyors.
• Abnormal costs, such as treating contaminated ground or working with listed buildings.
• Site-specific infrastructure, such as access roads and sustainable drainage systems, the ponds and swales that hold storm water.
• Every policy requirement, including the affordable housing, contributions to infrastructure, the Community Infrastructure Levy and biodiversity net gain.
• Finance, meaning the interest on the money borrowed to build.
• Professional, sales, marketing and legal costs, and a contingency for the unexpected.
• The builder's return, which the guidance sets out separately as a percentage of the sales value.

Two rules fix the order. The same guidance says that "the price paid for land is not a relevant justification for failing to accord with relevant policies in the plan". The August 2026 National Planning Policy Framework repeats it in policy DM5, on development viability, and extends it to the price agreed under an option agreement. It also says that a scheme which meets an up-to-date plan should be assumed to be viable. In plain terms, the affordable housing and the council's charges are settled by policy first, and a high price agreed for a field buys no relief from any of them.

The sales side starts with the UK House Price Index from HM Land Registry, which separates new builds from resales. In the July 2026 release, the average new build home in England sold for £398,175 in May 2026, against £288,307 for an existing home. The worked example uses £398,000. The regional spread is wide: new builds averaged £297,199 in the North West and £514,812 in the South East in the same month.

The affordable homes are a different market. A housing association, which the planning framework calls a registered provider, buys them from the builder and lets or part-sells them. The National Planning Policy Framework's glossary sets the terms. Social Rent homes must be let at a rent set under the government's rent policy for Social Rent. Affordable Rent homes are let under the policy for Affordable Rent, or at least 20% below local market rents. Discounted market sale homes are sold at least 20% below local market value. In each case the home must stay affordable for the next household too.

A housing association pays for a home what its rent can support over many years. The planning practice guidance recognises this when it says a scheme's value can come from sales or from "capitalised net rental income", which means the rent stream turned into a single price. Because the rent is capped, the price is capped. Havant Borough Council's May 2026 viability assumptions, prepared by Dixon Searle Partnership, use 45% and 55% of market value for the two rented tenures. The example uses 50%, the midpoint.

The cost of this to the scheme is called the affordable housing cross-subsidy. In the worked example, 32 of the 90 homes go to a housing association at half price, so the scheme sells for about 18% less than it would if every home went on the open market. Notice too that an affordable home costs exactly as much to build as the market home next door. On a market home, the bricks and mortar take about 41% of the sale price. Spread across the whole scheme, with the affordable homes bringing in half as much, they take 50%.

The builder's return on the affordable homes is lower, 6% of their value in Havant's assumptions, because the guidance accepts that a sale agreed in advance at a known price carries less risk.

Councils buy BCIS data for their viability studies. Havant's May 2026 assumptions use £1,817 per square metre for estate housing, the BCIS median adjusted for the area. The worked example assumes an average home of 90 square metres, roughly a three-bedroom house, so each home costs about £163,500 to build before anything around it is counted. Here is what each building line pays for on the ground, with the rate the example uses.

• The house itself, £1,817 a square metre. Foundations, walls, floors, roof, windows, kitchen, bathroom, wiring, plumbing and heating. The BCIS figure stops at the walls of each house.
• External works, 15% of build cost, about £24,500 a home. Everything between the houses: estate roads, pavements, street lighting, sewers, the drainage ponds and swales, gas, water, electricity and telecoms connections, garden fences and landscaping. Havant uses 15% for houses and 10% for flats; Harborough District Council's January 2025 study also uses 15%, to allow for drainage.
• Professional fees, 10% of build cost. Architects, engineers, planners, ecologists, project managers and building control. Havant uses 10%, dropping to 8% for its large-scale schemes.
• Contingency, 5% of build cost. The allowance for the things that go wrong, from bad weather to a change in ground conditions. Havant uses 5%, and 3% on its large-scale schemes.
• The Future Homes Standard, £6,000 a home. The higher energy standard for new homes, with better insulation and low-carbon heating. £6,000 is the baseline allowance in Harborough's study.
• Selling the homes, 3% of the open market sales plus £750 a home. Show homes, agents and marketing, and the legal fees on each sale, as in Havant's assumptions.
• Finance, 6.5% a year. Interest on the money borrowed to build before sales come in. The example takes interest on half the costs over a two-year build, which comes to 6.5% of those costs, and leaves out interest on the land itself.

On a larger site the list grows. Havant's assumptions add £30,000 a home for site works on its large-scale schemes, to cover preparation, servicing and transport requirements, and its strategic site carries a new primary school. On a ten-acre field a new junction onto the main road or a long sewer connection can play the same part.

Costs have also risen faster than prices. Savills' development land research for the second quarter of 2026 notes that growth in construction costs has outpaced house prices since 2021, and records greenfield land values falling 1.2% in the quarter and 3.3% over the year. When the cost lines rise and the sales line does not, the squeeze falls on the last line.

• Affordable housing. The local plan sets the share of homes on a major scheme, which for housing means ten or more homes or a site of half a hectare or more, that must be affordable. Policy HO5 of the August 2026 framework requires plans to set it, including a minimum share of Social Rent. Harborough's adopted plan asks for 40% on sites of more than ten homes. The example uses 35%.
• Section 106. The legal agreement with the council for the needs the scheme itself creates: school places, a junction, a bus service, a play area. Where a council also charges the levy, the agreement is kept to items on or next to the site, and Havant allows £3,000 a home. Where there is no levy, the agreement carries everything, and Chris Tinker of Crest Nicholson put a typical charge at £20,000 a home.
• The Community Infrastructure Levy, CIL. A charge per square metre of new floorspace, set by each council in a charging schedule and raised each year by an index. Folkestone and Hythe's 2026 rates for residential schemes run from nothing in Zone A to £177.30 a square metre in Zone D. Homes let or sold through a housing association can qualify for social housing relief under regulation 49 of the CIL Regulations 2010, so in practice the levy falls on the open market homes.
• Biodiversity net gain. The rule that a scheme must leave the habitat at least 10% better than it found it, and look after it for 30 years. Havant allows 2.4% of build cost on greenfield housing, about £3,900 a home; Harborough allows £1,003 a home. Where the gain cannot be found on site or bought locally, the government's statutory credits are the last resort, at £42,000 a credit at the lowest tier on the price list updated on 2 June 2026, with two credits needed for every unit of habitat. That is why developers plan the gain inside the site.
• The Building Safety Levy. A new charge in England on major residential schemes of ten or more homes, which came into force on 1 October 2026 and is collected through building control. Each council area has its own rate per square metre. Brighton and Hove's is £49.60 on greenfield land and £24.80 on previously developed land, because brownfield schemes receive a 50% discount. Social housing is exempt.

On land in the Green Belt, including grey belt, major schemes must also meet the Golden Rules in policy GB8. Until a council updates its plan, the affordable share is set 15 percentage points above the highest existing requirement, capped at 50%. The rules also ask for improvements to local infrastructure and new green space open to the public within a short walk of the homes, which takes more of the site and adds to the external works. Our grey belt guide explains how a site qualifies, and the section on what moves the share left over shows what 50% does to the sums.

How the agreements and charging schedules are negotiated and set is covered in our guide to Section 106 and CIL, and the habitat rules in our biodiversity net gain guide.

Not in the way the question usually means. No rule gives a builder a set share of the uplift with the rest passed to the landowner. What every scheme carries is a return on the whole development, measured on the sales value of the homes, which the builder's lenders insist on before they will lend and which councils assume when they test their plans. The planning practice guidance says 15% to 20% of gross development value "may be considered a suitable return to developers", and that a lower figure may suit the affordable homes.

The return is there because building 90 homes takes two or three years and millions of pounds of borrowed money, and the market can move while the homes are half built. A scheme that does not show it does not get funded.

The example uses 17.5% of the open market sales, the base case in Havant's May 2026 assumptions, and 6% of the affordable sales. Together they take 15 pence of every pound the scheme brings in. That is a cost line like the roads, and it comes off before the land in the same way.

The home count comes from the ten-acre field in our guide to how the price for your land is worked out, where roads, drainage, open space and a landscape buffer leave about 64% of the field for houses. That gives 90 homes, of which 32 are affordable at 35% and 58 are for open market sale. The rates are drawn from published studies and charging schedules in different council areas, so the example is a demonstration of the method, not a valuation of any real field.

Out of every pound paid for these homes, half goes on the houses themselves, about a quarter on the estate around them, fees, finance, the energy standard and selling, 15 pence on the builder's return and about six pence on the council's charges and the levies. Less than five pence is left.

That remainder is not a price for the field. It is what the scheme leaves after it has been built and sold, with planning permission already in hand. Before any of it can exist, someone has to pay for the planning work, from the surveys to the application and perhaps an appeal, and carry the risk that permission is refused and the money is lost. Someone also has to fund the years between the first survey and the last sale. All of it comes out of the same few pence.

This is why nobody can honestly name a figure for a field before it has been looked at. As the next section shows, a few per cent on the local house price, one abnormal cost or a different affordable share moves the remainder by more than its whole size.

A 10% move in the price of new homes is not a large one: in the House Price Index for May 2026, the new build average in the East of England was 23% above the East Midlands next door. On these costs, 10% either way is the difference between a scheme that more than doubles its remainder and one that does not work at all. At the North West's new build average of £297,199 the same 90 homes, with the same policy costs, come out well below zero. At the South East's £514,812 the share left over is several times the example's. Same scheme, same rules, a different part of the country.

The Golden Rules row shows why, on grey belt, the sums work best where homes sell well above the average. At 50% affordable, the arithmetic of the worked example leaves nothing at England's average price, before the extra green space and infrastructure the rules also ask for.

Two housebuilders' figures give a check from inside the industry. Persimmon, which built 11,905 homes in 2025, reported land cost recoveries of 11.5% of new housing revenue for that year, with a private average selling price of £301,392. In plain terms, about £11.50 of every £100 its buyers paid went on the land under their homes, and the rest on building, selling, overheads and profit. It is a different business on different sites, but a small share all the same.

Chris Tinker of Crest Nicholson gave Housing Today the other side of the ledger. He listed around £400,000 for roads and sewers, a similar sum for the affordable housing cross-subsidy, and £300,000 for Section 106, on the basis that each home typically attracted a £20,000 charge. The article dates from September 2019, gives no site size, and costs have moved since, so read the figures for their shape: three large items, each paid before anything reaches the land.

A greenfield site at the edge of a village is cheap to prepare and expensive in policy. The ground is usually sound and there is nothing to knock down, but it carries the full affordable share, net gain on habitat that was there before, the full levy rates, and often a new junction or footpath into the village. A previously developed site, the planning term for brownfield, is the reverse. It can need demolition, contaminated ground removed, old foundations broken out and services diverted, which are called abnormal costs. Harborough's viability report is plain that "all the costs of site clearance, remediation, and abnormal costs should come off the value of the land". But policy treats a brownfield site more gently in several ways.

The practical lesson is that a scruffy yard with a lawful commercial use is often a better prospect than it looks, and a clean field sometimes a harder one. The yard's abnormal costs are paid once, and the reliefs on affordable housing, habitat, the levy and the new safety charge can outweigh them. What we look for on that kind of site is on our brownfield land and yards page.

• A figure per acre for land with planning permission is a gross number from the top of the sum, for a consented site in a particular market. It is not a sum anyone is offered for a field without permission, and it is not what reaches the owner of a field with it.
• The lines that come off are fixed by policy, regulation and lenders, not chosen by the buyer, and they are the same whoever does the sums.
• The answer is local. On the same ten acres the share left over can be below zero or several times the worked example, depending on what new homes sell for within a few miles and which council sets the policy. A national average is a starting point, not an answer.

A letter from a land company that names no figure is not hiding one. On a field without permission there is no honest figure until the home count, the affordable share, the levy rates, the access and the ground have been looked at. Some arrangements also settle the cost lines after a sale rather than before it; our guide to promotion agreements and their deductions shows how those deductions work under that model.

It takes every line of the stack above off your side of the table. Under our option agreement, the price for your land is agreed and written down as a figure at the beginning, before we spend anything on planning, and it is set above what the land is worth in its current use. It is not reduced if the levy is indexed up, if the council raises its affordable requirement, if a new national charge arrives as the Building Safety Levy did in October 2026, if an ecology survey finds something, or if costs rise while the application is decided. Those are the lines on this page, and under our agreement they are our concern, not yours.

Every stage of the planning work, from the first surveys to any appeal, is paid for by us at our own risk; on a larger site it can reach £300,000. Once permission is in place we complete the purchase, and the price written into the agreement is paid to you on completion. Should permission be refused, the land stays yours and nothing is owed. You carry on farming or letting the land until completion, and the agreement continues while any application or appeal is being decided. We contribute to your own solicitor's and land agent's fees, so having the paperwork checked properly costs you nothing.

In a desktop review we look at the constraints on the land, the access, the likely number of homes, the council's position and the costs a scheme on it would carry, the same lines as on this page. The simplest way to find out what that means for your own field is a free desktop review of your land, with the answer in writing before anything is agreed.