Housebuilders nervous, says Savills
Research from Savills has revealed that residential development activity in 2010 improved slightly on the extreme lows of 2009. Savills’ latest 'Market in Minutes' report shows that land today is trading in certain locations – and at volumes less than half the levels experienced in 2006 and 2007.
Savills says the demand for land from home builders is low and trading volumes are thin. With transactions limited, the growth in development land values was stagnant in the final quarter of 2010.
Urban values were slightly up in the last quarter of 2010, on average 0.4 per cent, while greenfield land values fell by -0.1 per cent.
Michael Donaghy from the Savills East Midlands development team said: "The appetite from large house builders for large ‘oven-ready’ sites remains healthy and supply issues are a huge challenge. There is a lack of sites coming to the market, however most local developers have several sites already tied up in planning.
"This makes it difficult to predict who is buying from quarter to quarter. Sales directors of major house builders are getting the final say, indicating that they are nervous of a very slow recovery."
However, he added: “A loss of momentum is the biggest risk for marketing smaller sites, but we have seen a number of sales in the past few months in the area. This indicates that for the right sites, on the right terms, transactions are still taking place."
