Almost 50 volume and SME housebuilders based in England were surveyed as part of the firm's Residential Development Land Index for Q1 2021. According to the data, over 50% of respondents said residential land supply was “limited”. Only 2% of respondents thought land was “abundant”.
For Q1, a third of housebuilders surveyed cited planning delays as a challenging issue during the period and 21% pointed to the availability of land. Only 7% said the UK’s medium-to-long-term economic outlook had been a concern.
Looking to the next three months, 21% selected availability of land as the most pressing issue, with 18% choosing planning reforms and policy uncertainty and 15% supply chain delays”.
The survey also found that 19% of larger housebuilders saw the new Help to Buy as another key focus for Q2, alongside the availability of land and planning reform. Knight Frank said that land supply shortages were leading to an expectation that prices would rise, and 55% of its survey respondents said they thought this would happen in quarter two. Meanwhile, 38% predicted land values would remain the same; 7% anticipated a decrease.
The property consultancy’s latest index showed that in Q1, urban brownfield and greenfield land values grew by 0.2% and 0.9% respectively between January and March 2021.
But values were lower on an annual basis, with the value of greenfield development land dropping 4.8% and urban brownfield land falling 2.2% against 2020.
Justin Gaze, Knight Frank’s head of residential development land, comments: “We are seeing a sense of normality return to the market for the first time since the pandemic struck.
“New sites are quickly going under offer at the top end of our price expectations, and there is a severe lack of land availability for both medium and larger schemes. So much so that we’re seeing housebuilders being increasingly competitive in order to compete on sought-after sites of 50 units and above.”
