Development Land Prices Hit Five-Year Growth High

Source: Estates Gazette
Published: 8 May 2010

Residential development land values in England rose at their strongest rate since 2005 in the year to the end of March 2010, according to new figures from Knight Frank. The agent’s Residential Development Land Index shows that average residential land prices in England rose by 11.5% over the 12-month period. The strongest performing regions were central London, where values for prime sites were up by 14.8%; the South West, up by 15.4%; and the South East, up by 13.6%. Liam Bailey, head of residential research at KF, said that land values were rising on the back of improved demand, which was up by 15% in 2010 against an 8% growth in supply. “The housebuilders are in acquisition mode, looking very hard at greenfield locations, where they are finding a wider range of attractive sites than six months ago,” said Bailey. “Urban locations are still not being targeted outside London. Where they are, it is as much by the registered social landlords, which are still a force in these markets, as by housebuilders.” In the three months to the end of March, urban land values showed the largest increase in London – 6.8%. Greenfield sites showed the biggest hike in values in the West Midlands – 12%. Across the UK, Q1 prices rose by 2.4 & for urban land and by 6.6% for greenfield sites.