The Value Of Land Development On Brownfield
Uk land value forecast continue to show healthy increases in land
prices, with the expectation of this trend continuing over the
However, there are two major factors that will have significant
impact on the value of land and land prices over the medium to long
term. Namely, the severe housing shortage and the level and
supply of building development land nationally.
Of particular note, a Halifax Survey revealed that the number of
building land sites acquired for residential development
had declined since 1997, following developers' moving away
from the traditional building development land to that of mainly
redeveloping brownfield sites.
Most brownfield land developments have mainly been in
inner city areas on modest sized sites but with the potential for
a far greater number of units. These units - mostly flats, have
commanded very high prices in relation to the value of the land
are often perceived to be way over and above their real value.
However, there are two additional financial constraints
which impact on the value of land, faced by land property
developers today. Firstly, brownfield sites will nearly always
involve costly remediation; that is, the cost of cleaning
up a site such as a dis-used petrol station before building can
Secondly, there is the requirement that the developer
provide a percentage of development units as 'affordable
approximately a third less than the selling price. These
requirements not only erode profit margins but
impact on the the price of land.
In a nutshell, if we take a relatively small site that could
accommodate a high density
development of flats; with planning, the land price
is effectively increased. However, the number of affordable
units and any necessary remediation costs will impact on the
profitability of the overall development.
There have and continue to be great uncertainties in the land
property market in relation to the need for more affordable
housing and the level of supply for new development sites.
Needless to say these uncertainties and how they are eventually
resolved at a national level will have an impact on land prices.
Since not all land are equal, there can be huge variations in
perceived land values even within the same location rather than
just across regions. Apart from land location, topography and
desirability, there are other important factors all of which
will have a bearing when assessing uk land prices and the value of
land in the years ahead. These include:
Social and/or political change
Affordable housing requirements
Changes in the economy
New developments in the land and property market
No one can safely predict how the issue of demand for
affordable/social housing, the extent of approvals
on brownfield sites, based on density, nor how remediation
cost constraints of these sites will impact on future
If you are looking to acquire land plots, whether as a land
investor or as a self-builder, Contact Land
Property Finder. We work with reputable land brokers,
property and land agent who can help you find what you need
while achieving the best land values.
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