It marks the fourth consecutive quarterly rise for development land in England and Wales Development land values in England and Wales and marking a turnaround from 2012, when prices were largely static.
Meanwhile, development land values in prime central London climbed by 1.9% in the fourth quarter of 2013, a much more modest increase than the 4.5% rise seen in the third quarter and the 4% rise in the second quarter of the year.
In fact, this is the most modest uptick since the final quarter of 2012 and the report says that this reflects the slight slow down in the pace of growth in property prices for prime central London property but values were up by 14.4% on the year.
The report points out that the upward trend in development land values reflects that seen in house prices across the UK in 2013. UK house prices rose by 8.4% last year, according to Nationwide, with a 2.2% increase in the final quarter of the year. But prime central London prices ended 2013 up 7.7%, compared to 12.2% rise in 2011.
Gráinne Gilmore, head of UK residential research at Knight Frank, said that these price rises reflect the increased activity in the market which has been boosted by the introduction of the Help to Buy Equity Loan scheme in April last year.
The most recent government data on this scheme shows nearly 13,000 new build homes were bought between April and December last year using the equity loan. These sales were reasonably evenly spread across England and Wales, with 12% of loans taken up in the North West, and 17% in the South East.
New data from the Land Registry, analysed by Knight Frank, shows that the number of new build sales in England and Wales rose by 8% between April and the end of September 2013,compared to the same period in 2012.
‘As market activity has stepped up, developers have seen their cost of capital reduced as they
are able to sell their stock more quickly, and are effectively holding land for shorter periods of time. This allows room for land values to rise,’ explained Gilmore.
The increase in new build sales is not just in the south of the country, sales rates are also
picking up in the North, West and the Midlands.
