The plot thick­ens: the state of the land mar­ket in York­shire

Yorkshire Post - Property - - PROPERTY - Simon Dou­glas

THE lat­est government an­nounce­ments on plan­ning are de­signed to boost house build­ing across the UK. With a se­vere short­fall of new homes in York­shire, it’s time we cap­i­talised to the full by con­vert­ing the re­gion’s need into de­liv­ery.

Our lat­est re­search shows that sen­ti­ment in the house build­ing in­dus­try is pos­i­tive as we move into 2013, de­spite an un­cer­tain eco­nomic back­drop. Res­i­den­tial land prices out­per­formed house prices in 2012: Av­er­age UK green field land val­ues were up 3.6 per cent, ur­ban val­ues grew by 1.7 per cent, while house prices fell by 1.1 per cent.

Re­gion­ally though, hous­ing trans­ac­tion lev­els and mar­ket ac­tiv­ity are more im­por­tant drivers of de­vel­oper de­mand than house price growth and prices. De­vel­op­ers and house builders con­tinue to tar­get much of their lo­cal ac­tiv­ity to­wards higher value hous­ing mar­kets such as York, Har­ro­gate and Leeds. They are sub­se­quently find­ing a short­age of vi­able land to de­velop on in th­ese lo­ca­tions.

Most of the ma­jor house builders are still buy­ing lo­cally and are paying strong prices for prime devel­op­ment land in good lo­ca­tions.

Although this trend is pos­i­tive, th­ese busi­nesses are still be­com­ing ever more dis­cern­ing about what type of site will sell the most homes.

The medium sized de­vel­op­ers are all start­ing to move, how­ever they are some way off the pace of the ma­jors and are only very ac­tive within their home towns.

Re­cap­i­talised na­tional house builders, re­port­ing steadily in­creas­ing prof­its and re­duced debt, are in­creas­ingly us­ing up-front pay­ment as a means to se­cure land in Lon­don, the South-East and other high-value hous­ing mar­kets.

House builder con­fi­dence is cur­rently high. The ma­jor house builders are re­port­ing strong profit growth, while a re­cent Home Builders Fed­er­a­tion sur­vey re­ported an in­crease in net reser­va­tions be­tween Novem­ber and De­cem­ber: a first in its 21year his­tory.

Set against this back­drop, mort­gage lend­ing is show­ing some signs of eas­ing, boosted by a rise in lend­ing to first-time buy­ers, which was up 13 per cent in the year to Novem­ber 2012, ac­cord­ing to the Coun­cil of Mort­gage Lenders.

Cur­rent un­cer­tainty sur­round­ing the plan­ning process and a lack of con­fi­dence in the end homes mar­ket are the big­gest bar­ri­ers to land deals.

The strate­gic land mar­ket, which is much more long-term, is more buoy­ant across York­shire than it has been for years. That said, it’s never been harder to achieve plan­ning per­mis­sion for larger scale hous­ing de­vel­op­ments.

One way in which landown­ers can ‘de-risk’ a site’s saleabil­ity is by en­sur­ing all bases have been cov­ered by an agent be­fore bring­ing a site to mar­ket. Re­ports on plan­ning fea­si­bil­ity, drainage, build costs and any po­ten­tial wildlife is­sues can re­move the un­known fac­tors from a land sale. This in turn gives the house builder a lower risk, ‘ready to go’ package. We find that this ex­tra work and in­for­ma­tion does usu­ally en­sure a faster sale and can of­ten add to the price achieved per acre even if it costs more in the short-term.

We are in­volved on a day to day ba­sis in all stages of the devel­op­ment cy­cle, from strate­gic land pro­mo­tion all the way through to for­ward hous­ing sales. It is how­ever, a com­plex process, which needs each stage sim­pli­fy­ing and con­firm­ing legally in or­der to progress to the next. We are find­ing that it is es­sen­tial to keep up the mo­men­tum of a deal in or­der to get the best re­sults. Ul­ti­mately this ben­e­fits hous­ing de­liv­ery and po­ten­tial homeowners, which are clearly on the top of Cen­tral Government’s agenda. It’s im­por­tant that landown­ers act now so we can en­sure York­shire’s hous­ing has a fu­ture sup­ply of land on which to build.

Simon Dou­glas is Devel­op­ment Di­rec­tor at Sav­ills in Leeds, tel: 0113 220 1253 / sdou­glas@sav­ills. com

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