The regional land markets remain robust despite the political uncertainty but there is less appetite for risk, according to the latest Residential Development Land report by Savills.
In the first quarter of 2019, land values for UK greenfield and urban land changed very little, growing by just 0.2%, bringing annual growth to 1.3% and 1.8% respectively.
The Midlands and Scotland continue to buck the trend, outperforming the national average. Land values have increased by 0.6% in the West (West Midlands and South West) and 0.5% in Scotland in Q1 2019.
The land market remains relatively robust in much of the country. The number of sites sold in the Midlands, North, Scotland and South Wales is in line with or above 2018 levels. This is supported by sustained house price growth in these regions of up to 2.9% per year.
The most sought after sites are lower risk ‘oven ready’ sites. This includes smaller city centre sites and straight forward medium-sized sites (around 100–150 units) on the edge of established urban areas.
Housebuilders manage risk
There is less appetite for risk among housebuilders in response to underlying market uncertainty, slowing sales rates and the Government’s plan to end the Help to Buy scheme after March 2023. This is suppressing land values in London and the South, particularly where there is falling house price growth.