Increased confidence and appetite for land among housebuilders has seen the East of England’s development land values remain relatively stable and outperform the national average, according to a report.
Quarterly research from Savills shows that in the three months to the end of September, greenfield land values in the East of England increased by an average of 0.5 per cent – compared to the national average of 0.4 per cent. Urban values, meanwhile, dropped by just 0.1 per cent – compared to a national fall of 0.4 per cent.
Year on year, greenfield values in the East of England have dropped by an average of 0.9 per cent and urban values by an average of 1.7 per cent.
Tom Fraser, director in the development team at Savills in Cambridge (pictured left), said increased certainty in the aftermath of the General Election and the Government’s proposed changes to the National Planning Policy Framework (NPPF) had led to signs of growing positivity.
He said: “With the cost of debt stabilising, build costs slowing and housing market conditions improving there’s a definite sense of renewed confidence among housebuilders.
“Greater certainty in the wake of the General Election and the Government’s proposed changes to national planning policy have also added to growing positivity.
“Location and quality of planning permission is incredibly important when agreeing a sale. In particular, greenfield sites in primary locations – where planning permission is already in place, there is a decent transport network and strong demand for new homes – are generating strong competition. This in turn is helping to keep land values relatively stable.”
Savills has completed several deals in the East of England this year. They include a 12.6-acre site at Great Dunmow in Essex with planning permission for 108 new homes purchased by Cala Homes (pictured above) and the sale of a 51.4-acre site in Kelvedon with planning permission for 300 homes and community facilities to Barratt Homes.
A 97.16-acre site just west of the A140 in Long Stratton in Norfolk with planning permission for 600 homes has been sold to Norfolk Homes, while a 4.4-acre site in Colchester with planning permission for 119 new homes has been purchased by Hill House Developments (Colchester).
Tom said future demand for development land will be determined by the strength of the new build sales market, alongside the potential for builders to deliver alternative tenures including affordable homes and Build-to-Rent schemes.
“A steady recovery in sales rates for new homes will maintain competition for sites,” he said. “In the short term, the ongoing shortage of supply will also continue to support development land values.
“If the Government’s planning reform is implemented, this should result in a greater supply of land over the longer term.
“Many parties are also opportunistically looking to secure a position on Grey Belt sites. Others are looking to target local authorities should the NPPF be adopted with higher housing requirements, as well as sites where planning prospects were considered to be more long term than before.”
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