x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Urban residential land values continue to rise across the UK

Urban brownfield land prices continued to increase across the UK during the first quarter of the year, while prices even remained unchanged in prime central London, ending five consecutive quarters of prices declines, new figures show.

The divergence between the performance of greenfield and urban land markets across England has become less pronounced in recent months, but the data provided by Knight Frank’s research department suggests that markets remain relatively distinct, with different drivers.

Urban residential land values, based on sites across Birmingham, Manchester, Leeds, Bristol and outer London, continue to increase, supported in part by a widening supply-demand imbalance in these cities.

While urban land values have risen by a cumulative 21% since the beginning of 2015, the pace of annual growth in the urban land market has slowed to 3.9%, down from 13.4% in Q1 last year. The quarterly increase in prices was 2.9%, the strongest quarterly growth in a year, fuelled by outperformance in the Birmingham and Leeds markets.

The figures also reveal that average values in the greenfield land market rose by 1.4% in Q1, the first quarterly growth since December 2014, albeit at levels which do not necessarily indicate a substantial change of direction in the market.

As with the urban land market, growth in the greenfield land market is driven by particular areas of the country, especially the North and Midlands, where the appetite for land and limited supply is putting upward pressure on pricing.

But Knight Frank insist that a major consideration weighing on land values is the continued rise in construction costs, which are prompting a revision to development economics and appraisals in some cases.

In prime central London, average values have fallen by 14% since the third quarter of 2015. However, much like the market in 2010, there are signs that some investors are looking to return to the market as they perceive more stable pricing in the sales market.

“It will be interesting to note the relative performance of zone 1 compared to the rest of the capital over the next 12 months,” said Grainne Gilmore, head of UK residential research at Knight Frank. 

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up