The principal findings are:
Development land values have risen, albeit marginally, for the second quarter in a row.
Land values rose by 1.1% (urban land) and 1.6% (Greenfield) over the three months to the end of September.
Despite the recent growth, on an annual basis land values were down by 26.4% (urban land) and 16.8% (Greenfield).
Land values in and around urban areas remain almost 50% below their Q4 2007 peak.
Demand growth has been led by re-financed house-builders, but private equity groups are still significant players.
Commenting on the latest residential demand land index figures, Liam Bailey, head of residential research, Knight Frank said, ‘For the second quarter in a row development land values have risen – albeit by only a marginal amount.
Despite this recent rise, values still remain around 20% down year-on-year and, for urban sites, almost 50% below peak levels.
‘The market is still very thin in volume terms, with a stand-off between land-owners – who expect values to rise still further over the next 12 months – as builders try to acquire land and to rebuild stocks, and purchasers who are finding development financing still in short supply.
‘There has been a slight rise in the level of receivership stock coming to the market in recent months.
However the lack of distressed sellers means the current market is very different to that experienced in the early 1990s.
