2022-08-03-莱坊-UK_Res_Dev_Land_Index_Q2_2022_3页_2mb

Residential Development Land Market Summary: Q2 2022

This report from Knight Frank analyzes trends in the UK residential development land market for Q2 2022, highlighting key drivers and challenges.

Key Trends

• Land prices in Prime Central London increased by 2.5% year-on-year, while Greenfield land prices rose 13.9% and Urban Brownfield land values decreased by 1.1% but remain up 1.9% annually. This uptick reflects shortages and heightened demand.
• Demand for urban flats saw a slight rise as commuters returned to offices, supporting prices across the country.

Economic Drivers

• A cost-of-living crisis and potential house price slowdown are expected to ease pressure on land markets, but building costs are rising, with inflation forecast at 11.4% for 2022, impacting developers who face planning delays and supply chain disruptions.
• Shortages in development opportunities, including delays due to nutrient neutrality rules and electricity grid capacity, constrain supply and fund new schemes.

Market Outlook

• Housing delivery rates may slow due to reduced planning permissions and limited land availability, with the Help to Buy program ending expected to weigh on new build sales.
• Forward sales and sentiment are mixed, with concerns over buyer behavior and market cooling post-price peaks.

Challenges

• Building material shortages, labor costs, and regulatory hurdles are top challenges for developers, as seen in survey data.
• Overall, the market shows tension between rising costs and demand, with uncertainties over UK economic conditions and government policies, such as extensions to Help to Buy.

Key data points: London land values surged amid tight competition for plots, but costs could ease later in 2022 if house price growth moderates.