While Help to Buy is boosting the confidence of developers, it is the lack of development funding that is still the biggest risk to the sector, according to Knight Frank, which recently released its annual report on the new-build housing sector, based on a survey of senior executives from over 100 house builders and developers in the UK.
Aside from the strongest demand being for 3-bed houses, 75% of respondents said there was a moderate to high demand for
2-bed flats in the East and West Midlands, signalling a potential recovery emerging in regional city centre new-build markets.
Even though many developers have been land banking over the past few years, 61% of those surveyed expect land prices to
rise over the next 12 months and the acquisition of land for development is also expected to increase.
David Fenton, Knight Frank head of Regional Land, says: "Across the UK we are seeing a resurgence in acquisition activity and construction from the major PLC house builders. It is clear that sales rates have improved as a result of Help to Buy and there is an atmosphere of positivity in the market."
If Help to Buy is boosting demand for development land, will the new planning changes - allowing conversion from commercial to residential property without planning permission - decrease demand for greenfield land? Also, what other obstacles are developers currently faced with?