North-South divide in land values widens

By James Kenny
Published: 19 October 2011
Source: Estates Gazette

The North-South divide has continued to widen in residential development land according to the latest results from Knight Frank's Residential Development Land Index.

The Q3 2011 results found that the pace and value of brownfield land in urban areas across England slipped in Q3 at the fastest paces since the end of the year, resulting in the first annual decline in prices since late 2009.

The price of English greenfield land remained unchanged on the quarter after a 1.3% drop in Q2, while annual growth slowed to 1%. Grainne Gilmore, head of UK residential research at Knight Frank, said: "The differential between the markets for land in the best locations and land which is poorly situated continues to widen, with agents reporting that the difference between demand levels and pricing can vary from road to road in some areas.

"The very best schemes, including prime sites in and around market towns, especially in the south are still attracting interest and there is stiff competition between bidders. But poorly-located land is now available at heavily reduced prices."

According to Knight Frank, the public sector remains the primary seller across the country, but speculative land investors and private land owners were also active during the quarter, especially in the East Midlands.

Residential developers and housebuilders remained key buyers across the UK, although housing associations also stepped up their activity in the West Midlands between June and September.