The UK land market

Published by Savills

The value of land continues to increase in the Midlands and Scotland. Housing associations are looking to develop more homes, while house builders are becoming more active in the Midlands

Graph on completed/ number of plots by Savills

The Midlands and Scotland continue to lead greenfield land value growth this quarter where house price growth is strongest. Development land values in the East, West and Scotland increased by 1.6%, 0.9% and 2.0% respectively in Q2 2018. More housebuilders are now active in the Midlands.

The supply of permissioned land is increasing, suppressing land value growth. In 2017, 391,000 homes were granted planning permission in Britain, up 21% on 2016. UK greenfield land values increased by 0.8% in Q2 2018. UK urban land values stayed constant, having increased by 4% in Q1 2018.

Housing associations are taking a more active role in housebuilding. The top 50 housing associations expect to deliver 250,000 homes during the next five years, increasing output by 50%. To do this, they will need to secure 138,000 more plots.

Homes England plans to dispose of 127 residential sites during the next year. Of these, 29% have outline or detailed planning consent, while 30% are not yet allocated or proposed to be allocated in a Local Plan. Releasing these sites is expected to speed up delivery, in line with government targets.

According to the Letwin Review, a greater variety of types and tenures of homes are needed to increase delivery rates. This means delivering more affordable homes and those for rent as well as for sale. The strategic partnership deals between Homes England and housing associations are a positive step towards achieving this.

Savills research found that Housing associations are now competing for land more than ever. The top 50 associations expect to deliver 53,000 homes per year up from 35,000 and will need to secure 138,000 plots to achieve this over the next 5 years.

In its Land Development and Disposal Plan, Homes England has listed the sites it intends to bring to the market in the next year. Of these, 127 of the 221 sites are suitable for residential development. Some 29% of these sites have outline or detailed planning permission, 30% are not yet allocated or proposed to be allocated in a Local Plan.

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