UK: Slower land value growth in an increasingly polarised market
Residential development land values across the UK have seen limited growth in the last three to six months as the market becomes increasingly polarised, with substantial differences between high value areas and the rest of the country, according to international real estate adviser, Savills.
UK greenfield and development land values increased by 0.5 percent and 1.6 percent respectively in the first quarter of 2015. Growth has been constrained by high construction costs, with fewer bids per site in some parts of the UK. Lower levels of competition mean that values remain below their former peak in markets such as Lincoln, Telford, Norwich and Milton Keynes.
In London, residential land values were impacted by election uncertainty as well as high construction costs, remaining static in the six months to March 2015.
“The London residential development market is pausing for breath after a period of very strong growth. However, sites in areas with good transport links or planned infrastructure improvements continue to attract a high number of bids,” says Susan Emmett, Director, Savills Research.
Elsewhere, Scotland stands out as experiencing strong increases in urban development land values, up by 6.9%.