Is a property's potential to extend taken into account in its valuation?

[Ixos]

If you had two identical houses, one with an area to the side that would allow for a two storey side extension, one that did not - would there be a difference in their prices? Is potential taken into account in an asking price? Would a mortgage valuation take it into account?

There is a local house that has this potential to extend - it is quite unusual as most other houses of its type locally do not. Any thoughts? Thanks

I would say that it would be. We are in the process of buying a house with a garage for that very reason (so we can extend) and it is about £20-£30k more expensive then the exact same houses on the street which do not have garages.

Strictly speaking, valuers are not allowed to include "potential" in their mortgage valuations if it needs planning permission (I'm not an expert btw, thats just my understanding). Estate agents are not restricted in any that way so can price a property at any price they like depending on how popular they think it will be and arguably, the potential to extend means that it will generate more interest and therefore be more valuable that if it didn't have the space to extend.

Though what they will take into account (as far as I am aware) is the plot size - so a house with the garden size to take an extension would be valued higher than one with a smaller garden. Same sized gardens but different layout would not make much odds I don't think.

From what I can gather about it the basic valuation is to take square foot of house, no of reception/baths/beds, outside buildings/garage and plot size. They will chuck in a state of repair element and then plug it all into a computer with the post code....voila....computer says....OK, OK slightly cynical - but a lot of it is that.

If a valuation has come in particularly low and you have a tame/reliable estate agent they may be able to argue the case a little to increase the value if they can prove it with actual sold prices. When we had our valuation done the local agent said he would happily argue our case for a few grand (which would have made the difference between LTV rates rather than actually mortgage approval IYSWIM)...so an estate agent may be able to say that "In this, this and this example of sold prices the corner plot properties all sold for £10k more than corresponding properties without the the corner plot".