The growth in land values moderated across England and Wales in the final quarter of 2014, reflecting the movement in the wider housing market, the latest report from Knight Frank shows.

However residential development land values in prime central London continued their strong growth, ending the year up 24%. Greenfield residential development land values remained broadly static in the final quarter of 2014, rising by just 0.1%.

Grainne Gilmore, head of UK residential research at Knight Frank pointed out that the annual rate of growth at 2.3% is well below the 7.2% average growth seen in house prices over the year.

‘However it is likely that land price growth will remain subdued over the coming year as rising costs press on margins,’ she explained, and added that activity in the land market has certainly picked up over the last 12 to 18 months. This is reflected in 17% rise in private units under construction across the UK in December 2014 compared to December 2013.

The report also shows that there has been an increase in activity in most regions with demand for new housing is also robust across most parts of the country.