England and Wales development land prices went down by 0.9 percent in the second quarter of this year. What led to this downfall in development land prices?The reasons that led to the development downfall may be connected to the strategic approach of the house builders and developers. According to a previous report by propertywire.com, "The average price of greenfield land in England and Wales fell by just under 1 percent between April and June."
However, according to the latest report by landregistry.co.uk, "House prices in England and Wales fell by 0.9% in October 2011, taking the annual fall in prices to 3.2 percent and the average price of a property to £159,999." Further reports by propertywire.com, showed that, "The 0.9 percent fall was a moderate decline than the 1.8 percent fall that was recorded in the first quarter."
The drop in development price is not affecting all markets. It is a localized incident that has affected only some areas within England and Wales. For instance, "The Development land prices in prime central London, for example, are up by 0.9 percent in the second quarter of the year and up 12.1 percent on an annual basis as stated in a report by propertywire.com.
It stands out that the house builders and developers are more selective about the sites they are now choosing to buy as stated in a report by propertywire.com. In central London there is still good demand for development land, although buyers are applying more detailed criteria before making offers as reported by propertywire.com. There are possibilities of cost inflation in building but according to the previous report by propertywire.com, "The house builders are generally maintaining their margins, and weighing on land prices." Despite the localized development downfall, it is not the end of the affected markets because there is always real opportunity for growth, such as areas in outer London, and sites wherein there are complete units that can be delivered in less than £1,000 per square foot as stated in a report by bpf.org.uk.
