The large housebuilders have reported positive performances over the last year or so, with higher margins and volumes of development. As they approach their optimum production volumes they need less new land, reverting to land acquisition to replenish stocks as plots are built out.

Consequently, they are being more selective in the sites they buy, leaving more opportunities for small and medium sized housebuilders.

The availability of materials and labour has become an increasingly major constraint on housebuilding according to the HBF since 2013. Rising build costs due to increased labour and materials costs are presenting a big challenge to many developers.

"Rising build costs due to increased labour and materials costs are presenting a big challenge to many developers"

Tender prices have recovered to peak levels according to the BCIS and are forecast to continue rising by around 5% per annum over the next five years. They have increased marginally above average house prices and significantly above land prices since 2007.

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Taken from
Market in Minutes: UK Residential Development Land - Nov 2014