Research by Alliance Fund reveals that the average demand for plots of land in England currently sits at 50.8%, and reveals where developers should most focus their attention when looking for new opportunities.
One of the reasons that house prices in England have increased so dramatically over the past couple of years is the fact that buyer demand has shot up while supply has remained more or less stagnant. To restore balance to the market, developers need to be delivering more new homes.
To this end, Alliance Fund has analysed current land market demand to identify where in England developers are likely to find the most plentiful opportunities. Demand is calculated by measuring all land that is currently listed for sale against that which is already sold (sold subject to contract or under offer). E.g, if 100 plots are listed and 60 are already sold, the demand score would be 60%.
The current demand for land in England averages out at 50.8%, meaning just over half of the 8,998 plots currently listed on the market are already sold.
Demand is strongest in the East of England where it currently stands at 57.6%, followed by Yorkshire & Humber at 56.3%.
Two other regions have a demand score above the national average. They are the South East (52.9%) South West (52.9%).
Demand is at its lowest in London, currently sitting at just 33.9%, with the North East scoring a little higher at 37.9%.
However, developers who are looking for locations that offer the best opportunities might be wise to look beyond these regions due to the fact that the number of available land plots is small – just 209 and 284 respectively.
Instead, developers could turn their attention to the East Midlands where demand currently sits well below average at 44.1%, and where a total of 1,279 current land listings accounts for 14.2% of England’s total.
Of the 8,998 plots of land currently listed on England’s market, the average price is £264 per square foot.
The nation’s most expensive regional land market is London where the average plot costs £579 per square foot.
Land in the South East comes at an average cost of £367 per square foot, and in the East of England, the price is £274.
Yorkshire & Humber (£168) and the North West (£157) provide good value for money, but with demand at 56.3% and 46.3% respectively, developers may face strong competition when acquiring the best plots.
Perhaps attention should be given to the North East where the average price is £134 per square foot and demand is among the nation’s lowest levels at just 37.9%.
CEO of Alliance Fund, Iain Crawford said, “England’s land plots are few and far between. There are less than 9,000 currently available on the open market and half of those have already been snapped up by keen developers and investors, meaning there are actually about 4,500 plots up for grabs.
“The obvious first ports of call for developers who are looking for land are the South East and South West. Between them, they harbour around 42% of England’s entire land stock but both demand and prices are above average.
“Maybe the most savvy of developers will turn their attention to the North East where low prices and low demand mean that land plots are easy and affordable to snap up, even if, in the grand scheme of things, the number of available plots is lower than in some other regions.
“If developers can’t find appropriate land in the north, then the East of England also carried great promise. Because of this, we expect regions in the midlands and further up will become the true focal points of new-build development over the next couple of years.”
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