Unceasing demand for development land in Oxfordshire and the Thames Valley resulted in strong value growth and high levels of activity during 2021, according to specialists at Savills.
In the South East, the value of greenfield development land increased by seven per cent last year, the highest annual growth since 2015, while urban development land saw an increase of five per cent, the highest since 2016.
Despite a shortage of consented development land, Savills south central development and valuations team completed more than £333 million worth of land sales across 42 sites in Oxfordshire and the Thames Valley during 2021 – paving the way for a total 6,971 new homes.
Significant deals in the region included a 10.5-acre site at Burghfield Common in Berkshire, which was sold to Croudace Homes with permission for up to 100 dwellings, and the sale of the final phase of Barton Park, a 90-acre urban extension on the edge of Oxford with outline consent for 885 new homes and ancillary uses, to Countryside.
Tim Watson, director and joint head of the south central team, based in Oxford, said: “Rising house prices, coupled with a constrained supply of consented land and sustained robust levels of transactional activity have resulted in significant competition for sites throughout 2021.
“All types of developers, from housebuilders to housing associations, were active, in some cases widening their search patches and bidding competitively on smaller sites. We saw the major housebuilders get back to pre-pandemic levels of land buying to fill gaps in their pipelines and progress future growth strategies.”
The first few months of the year started strongly according to Ed Keeling, director and joint head of the development team, based in Reading.
He said: “The end of Help to Buy doesn’t appear to be having a material impact on the land market, with most of the major housebuilders planning for growth in completions post-2023, partly through an increase in outlets.
“Although competition for land is likely to remain strong because of the imbalance in supply and demand, future uncertainty around build costs and environmental requirements have the potential to temper future growth in land values.
“We know that developers are starting to factor increasing costs to meet the Future Homes Standard in addition to other environmental mitigation provisions into their land bids.”
Environmental, social and governance (ESG) is also creating opportunities, said Mr Keeling.
He went on: “M&G announced its investment of £500m in Oxfordshire sustainable developer Greencore last month and I think we can expect to see more niche developers partnering with new funding arrangements this year, creating a new sector of the market at scale.”
Image shows the Burghfield Common site.
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