With regard to the site, how large is large and how small is small.
I think your mother is spot on with her assessment. A lot of our housing stock in this country is dated and crumbling. The bricks and mortar are not worth much. Many houses tend to be energy inefficient, dampish and cold and very often without much style or individuality about them.
The value of many properties in well located areas in particular has mainly to do with their site value. The question I would be asking about your mothers property is what would the value of the site be if the house was knocked down and if that were to happen, Is it possible to build more than one house in replacement.This is certainly how an investor will view the property also.
My guess is that we are going to see a lot of "perfectly good" houses knocked down in this country in the coming decade and replaced by much
better quality contemporary versions. This is especially true in parts of SCD where non-spectacular houses went up in the 1960s and are now reaching the end of their useful lives. Whats the point in spending 600K on a 1960s property where the site is worth 520K and the structure is only worth 80K. The obvious action is to knock the building and rebuild on the valuable site
Your mother has a detached property and she is absolutely correct to be "eyeing up" the value of the site as opposed to the heap of rubble that occupies it. In general and in this type of circumstance its not the building that contains the value. IT'S THE SITE !!!!!!!