Cost of land falls in central London
16 June 2016, Blog
The price of development land in central London has fallen by 2.7% over the last six months; new research from Knight Frank has shown. This slump comes as the rate of house price growth in central London becomes markedly slower than previous years, with the year-on-year average values up by only 1%.
Along with high construction costs limiting the viability of developments in urban markets, it was reported that developers have been more selective in buying sites for the last 18-24 months. Knight Frank has put the latter in part down to housebuilders having already spent their land budgets. David Fenton of Knight Frank added “Housebuilders already have a lot of land that they’re working through. There have also been a lot of very large planning consents granted, for 2,000 or 3,000 homes, which will take time to complete.”
However, housing developers were also shown to be progressively turning towards outer London boroughs for sites that would attract more demand due to their affordability. Indeed, it was concluded that urban brownfield land prices continued to rise significantly, as the demand for affordable housing in cities remains high.