Residential land prices in the Great Britain grew by 12.5 percent over the last six months as developers competed to secure areas with planning permission and to secure exposure to the city’s booming housing market, according to a report by British real estate firm Savills.
As a result, the rarest residential sites are selling close to their 2007 peak values today.
The rise in land market values are leading London home values ahead by six months, creating an expectation of rising property prices among investors and users.
However, land prices outside London remain unmoved and depressed because of developers who are reluctant to invest given the unpredictable economy and uncertainties about how each local authority will approach the Coalition’s localism agenda, which is offering council tax incentives for developments that will be approved.
According to Savills, land values in the North dropped by 71 percent from their 2007 peak and are still continuing to fall.
The difference in residential property values between London and the rest of the United Kingdom is a great concern for the government, who has recognized home building as one mechanism for economic growth.
Savills head of research Yolande Barnes said that a shortage of developable land at little more than half the levels seen in 2006 and 2007 is expected unless there will be a pick up in new planning consents.
Savills is a British-based global firm of estate agents, property advisors, property management operators, planning consultants and surveyors. It has an international network of more than 200 offices and associates throughout the Americas, the UK, continental Europe, Asia Pacific, Africa and the Middle East.