Research has revealed considerable variation across the East’s development land market with strong interest for ‘oven ready’ sites in well-connected locations, tempered by a dip in average values.
The quarterly report from property experts Savills says that while enthusiasm surrounding new planning policy has led to an increase in sites coming to the market, some housebuilders remain nervous about the economy and housing market.
According to the research the value of greenfield sites in the East of England fell by 0.7 per cent in the three months to June – a drop of 0.1 per cent over the last year. Across Great Britain as a whole, greenfield land values fell by 0.2 per cent, with annual growth of 0.6 per cent.
Urban land values fell by 1.5 per cent in the East of England in the three months to the end of June – equating to an annual fall of 0.9 per cent. Nationally, urban land values fell by 0.7 per cent in the last quarter, a drop of 2.3 per cent year on year.
Abigail Jones, who leads the development team at Savills in Cambridge, said within quarter two the department exchanged or completed on seven transactions within the East of England – two of which were strategic land sales and five of which sold to PLC housebuilders or investors.
She said: “Changes to the National Planning Policy Framework have led to an increase in the number of sites coming to the market as landowners look to take advantage of recent reforms.
“Major housebuilders remain highly active and there has been more competitive bidding on consented land from 75 units upwards. The introduction of the Grey Belt has also seen increased focus on strategic sites, with PLC housebuilders offering the most competitive terms and large premiums.
“The number and quality of bids received for immediate sites – those that are ‘oven ready’ with planning permission in place and in well-connected locations – is also back to higher levels that we experienced in 2022, mainly from privately funded SMEs and PLCs.
“A site we’re involved with near Peterborough, for example, recently received over 10 offers before going to best and finals.
“Conversely, we are generally seeing less competition for smaller sites as a result of SME developers being disproportionately affected by higher build costs.”
According to the Savills report, changes to the National Planning Policy Framework (NPPF) introduced in December 2024 have led to an uptick in the number of sites coming to the market since the start of the year, with a net balance of 27 per cent of Savills’ development agents nationally reporting an increase in supply over the second quarter.
However, this greater positivity has not translated into stronger market performance, with a net balance of 47 per cent of Savills’ development agents reporting positive market sentiment in the second quarter, a 16 per cent decrease from the first quarter.
Sales rates for new homes have also remained consistently at around 0.6 sales per outlet per week over the last year to March 2025, with no signs of significant improvement, the report says.
Abigail went on: “Looking ahead, the Government has demonstrated commitment to boosting housing through funding for affordable homes, SME support, a mortgage guarantee scheme and a National Housing Bank.
“These initiatives will take time to have an impact on delivery numbers, but we expect to see an uptick in activity over the longer term.”
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