The UK is seeing a highly regionalised housing market reflected in a multi-speed development land market, with urban brownfield sites powering ahead of greenfield and PCL.
Knight Frank’s development land index, which is based on the valuations of actual development sites around the country, shows greenfield land prices dipped yet again in Q4, taking the annual change movement to -4.9%.
At the other end of the scale, brownfield land – particularly in outer London, Manchester, Leeds, Birmingham and Bristol – saw a 2.5% boost in the last three months of the year, taking the annual growth to 11.9%.
Land prices in PCL declined by 1.1% in Q4, leaving them ever so slightly down over the course of the year (0.2%).
These land prices echo what’s going on in the housing market at the moment, says Knight Frank – highly regionalised, with slowing price growth in PCL and outperformance in key cities and commuter towns.
Demand amongst developers for urban sites outside of central London has picked up “significant momentum” in the last 12 months, driven in the main by local economic growth and improved buyer sentiment, and lagging the pick-up in demand seen in the wider greenfield market two years ago.
Those active in the greenfield market have largely replenished their pipeline land supplies, says the report, although there’s still plenty of demand for smaller, ovenready sites. Key challenges continue to include the lengthy planning process and some serious skills shortages.