Scotland land bounce
Development land values in Scotland are rising. There is more demand for land as developers come back to the market after uncertainty around the referendum. Values for greenfield land in Scotland increased in the last quarter by 4.8% and 12% in the last year.
Small greenfield and urban sites in Scotland have seen the most demand and highest increase in value. In Edinburgh, where the highest land values are found, prices rises have been as much as 10% in the last quarter of 2014. In Glasgow, it is urban land and greenfield land in high value areas surrounding the city that have seen the greatest increase in values.
Cambridge strides ahead
Land in and around Cambridge continues to remain in high demand pushing development land prices to new highs. The demand for land in Cambridge is the result of the city successfully becoming a leading centre of technology and business and the need to provide housing for both the employees of these sectors and the academic population (see the forthcoming Savills Spotlight on Cambridge for additional detail on the city).
Essex commuting
Commuter locations in Essex are seeing renewed demand and land values are climbing as a result. Sites are being keenly sought in Brentwood, and Colchester has seen renewed interest with recent sites achieving values above expectations. Along with Colchester, development in these well connected, commuter locations provides housing that is more affordable than in the capital as well as for those in the local area.
Regional rise
The increased activity reported in the regional development land markets during 2014 is confirmed by the end of year results from Savills. Our development database shows that whilst in 2013 the largest sites sold were all located in London, only two of the largest ten sites sold in 2014 were in the capital. Additionally the strong results reported in the housebuilder annual reports represent a productive year across the country.
This boost in the industry has gone a considerable way to increasing the number of homes built per year (140,000 to Q3 2014 from 120,000 to Q3 2013), however, there are limitations to continued expansion including the availability of skilled labour.
Politics and Policies
With the election looming, housing has become a political issue and all three main political parties are in favour of building more homes to meet housing need.
• Labour have set a target of delivering 200,000 new homes a year by 2020 by encouraging more house building by housing associations, local authorities, SME house builders and custom build.
• The Liberal Democrats have a similar approach but a much higher target at 300,000 a year.
• The Conservatives have not set an overall target. However, the Tories’ Starter Home scheme aims to deliver 100,000 new homes on brownfield land to be sold at 20% below the market rates to first-time buyers under 40.
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