Summary

  • In the strong, high-demand housing markets, competition amongst bidders for land is high and values are recovering strongly.
  • This comes as some developers have recapitalised and are actively searching for new, small ‘easy’ sites.
  • The land market has divided into two tiers. Many large sites, even those with planning permission, needing promotional capital beyond the means of developers remain mothballed.
  • Land values saw relatively modest growth over the second quarter of 2010. Average greenfield land values rose by 3.2% over the quarter and urban land values rose by 3.8%, bringing annual rates to 16.6% and 14.1% respectively.
  • These averages disguise a wide range of discrepancies, polarised between North and South; high value and low value housing markets; large, infrastructure-hungry sites and small easy to develop de-risked sites.
  • South East, greenfield values are growing fastest.
    By contrast, urban values in the North continue to slide.
    In London, land values have grown particularly strongly. Among the three types of development land we monitor, small to medium sized residential sites in prime locations have led the way.