Land prices for house building fall for first time since 2012
Some good news for house buyers is that for the first time since 2012 and following a number of quarters of growth slowing down, we can report that land prices for house building has declined. What the latest figures show is that there has been a fall of 1.8% in the first three months of this year.
However, as usual the picture across the country is not all the same, but prices in prime central London also stalled for the first three months. This has surprised many and it is the first time that land prices here have not risen since the index was first recorded in 2012.
What has been seen is that house builders have replenished their stocks of land, both consented and as a strategic purchase over the last 12 to 18 months. Many have started to ease their strategic land purchases through the planning system; this has, to some extent, dampened the demand for consented building land.
Developers have been seeking out land that can be described as strategic as profit margins are higher on these speculations. However, as with many things, and in the short term at any rate, the housing market has been affected by the upcoming general election, many developers and house builders putting on hold any decisions about purchases until after the result is known.
We all know that all parties contesting the election have indicated their support for a boost in housing supply over the next few years, which includes schemes such as brownfield regeneration funds. What cannot be contested though is that there will be increased costs involved with building houses, with materials and labour continuing to cost more, this it is believed is helping to force land prices down.