In these uncertain times and with little clarity and applicable historical data points, how can we assess the value of development land? Last month, I attended a TrustedLand Virtual Conference to pick up a debate that Richard Little had started in these very pages a few months ago here in Property Investor News.

At the Conference, Panel Chair Jeremy Leaf, the former RICS Resi Chairman, was well placed to lead this conversation with experts from leading real estate agencies Savills, JLL and CBRE. The core topic of debate - how a small change in GDV can have a dramatic effect on land values and the viability of a development.

Residential market review
Dr. Lucy Greenwood, director of residential research at Savills, opened the session with a recently released report on “The Impact of Covid-19 on the Housing Market”, which shows the significant reduction in the number of sales agreed in March–May 2020.

As things opened up in June, the number of sales outpaced June 2019 transactions by 30%. Lucy attributes this to a lot of “pent up demand” in the market but her question is “How long will this last for?”

Lucy showed us a forecast of house prices for the next five years (image as shown). This assumes that unemployment will rise towards the end of the year, furlough support ends on schedule and that the economic impact will begin to be visible in national datasets.

This forecast predicts that it will be 2022 before we see “normal levels of price growth” but that the previously forecast 15% growth over the next five years is still achievable but the shape of that recovery has now changed.