Knight Frank’s latest Residential Development Land Index has found that after several quarters of slowing growth, the average value of greenfield residential development land fell in Q1, for the first time since December 2012.

Development land prices in prime central London also stalled in the first three months of the year, the first time they have not risen since the index began in 2012. However, on an annual basis, prime central London development land prices are up 18.5% compared to Q1 2014.

Nationally, the average Greenfield residential development land price fell by 1.8% in Q1, taking the annual change to -0.5%.

Gráinne Gilmore, head of Knight Frank UK residential research, commented: “On a short-term basis, the development land market, much like the housing market, has also been affected by the upcoming election, with some developers and house builders deferring decisions in recent months until the outcome of the election is clear.

“A theme that is set to continue through the election and the rest of the year is the increased cost of building. Material and labour costs continue to rise, and this is also putting downward pressure on land prices.”