Land buying appetite grows across UK

Appetite for buying land among house builders, property companies and PLCs alike has increased this year, as housing market activity remains positive, new analysis from CBRE reveals.

Land buyers are seeking land with planning consent to add to their reserves, although good quality land in UK regions is of short supply. Land values in most regions have shown slight growth over the first Q1, mirrored by tentative signs of increased activity in the housing market.

According to the Council for Mortgage Lenders, gross lending has increased for the sixth consecutive month, with first-time buyers now accounting for 42% of mortgages.

Jennet Siebrits, Head of Residential Research at CBRE, said: “We believe that Government housing initiatives will help drive underlying confidence in the market. ‘Help to Buy’ could support around 215,000 further mortgages per year. Although not all of these transactions will be linked to new-build homes, it should strengthen confidence in land buying, as purchasers will look to access an active market.”

Q1 2013 across the regions:

London
Developers looking to increase output over the next two years are seeking consented brownfield sites that can accommodate 50-150 units. Smaller consented brownfield sites are showing strong projections of return on investment.

South East & South Central
Demand from house builders has led to a pick up in activity in the South. However, supply remains restricted. Good quality, consented, greenfield sites are consequently centre of high levels of interest. Volume house builders are targeting consented schemes, whereas Prop Cos are honing in on the unconsented.

South West
National house builders are hungry for sites that can accommodate 50-200 units, but supply of land remains constrained. New entrants to the market have bolstered demand for strategic housing sites.

Midlands
Improved sentiment in the market has led to better rates of sales in the Midlands, strengthening market demand. PLCs with gaps in the pipeline in 2014 are looking for consented land that is ready for immediate development.

North
Activity in the North has remained relatively static over the last quarter. However, PLCs and national house builders have ramped up their purchase requirements, causing land values for the best sites to rise.

Scotland
Increasing levels of equity are leading house builders to bid for medium to large sites appropriate for family housing. Unless very well located, there is little demand for unconsented sites.

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