16 April 2020

The average value of greenfield residential development land has held in price over the past 12 months, in the context of the political uncertainty that characterised 2019. The UK General Election in December 2019 restored confidence in buyers of homes and land, with an increase in certainty offered by the new Government’s majority in addition to its strategies for Brexit and the wider economy.

Despite the relatively high levels of planning consents coming forward, the market in many parts of the UK has been underpinned over the past 12 months by a lack of land supply. As such, with medium to long term new homes targets, housebuilders have had to remain competitive in order to secure new opportunities.

This trend has manifested itself with the strongest demand for policy compliant, deliverable sites of 50-150 plots. Development opportunities at this scale have attracted a broad range of bidders, including some of the major national and plc housebuilders, where we have witnessed a reduction in their minimum requirements in order to secure new land opportunities.

The outbreak of COVID-19, declared by the World Health Organisation as a ‘Global Pandemic’ on 11 March 2020, has impacted property markets in the UK. From our own experience in dealing with development land transactions through this challenging period, we have witnessed a slowdown in market activity as a result of the increase in restrictive measures put in place by central Government.

For the time being, we have noted housebuilders are focused on preserving cash flow, protecting their businesses and dealing with the operational challenges of temporary site closures and protecting their staff in line with central Government advice.

Nonetheless, purchasers remain committed to development land transactions and would appear loath to lose the positions achieved on sites that were keenly contested in January and February, but not yet transacted. Current sentiment recognises the current economic turbulence is not the result of any wider market failure, rather the current health crisis. 

As such we have not witnessed an impact on average prices but are instead handling purchaser requests for delayed completions or deferred payment terms. Such decisions are influenced by a requirement to maintain cashflow in the short term. Purchasers are also acknowledging the typical time lag between land sale and new homes marketing, by which point housebuilders anticipate improvements in residential market sentiment.

The strategic land market has been resilient to date, with investors, land promoters and developers all acknowledging the longer-term return profile associated with strategic land investment. We are reporting good levels of activity in the negotiation of new option and promotion agreements, with land promoters and developers continuing to employ acquisition strategies to meet their medium to long term aspirations. We expect this to continue as the strategic land market provides a focus on planning gain and revenue projection in medium to longer term. 

We also anticipate greater activity in freehold transactions of strategic land, as vendors seek to raise capital in the short to medium term and developers/investors use cash reserves to secure stronger short-term positions in long term promotional projects.

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Our specialist teams operate at national level. Select a region below to find your nearest consultant.

Jon leads the Carter Jonas London development team, providing strategic development advice, feasibility and viability studies, acquisition, disposal and marketing advice and advice on structuring and procuring development partnerships. He has 30 years’ experience, working initially in local government and then in consultancy at Donaldsons, Knight Frank and GL Hearn.

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John is Head of the Leeds office and the Planning & Development Team North. John advises clients on proposed development projects throughout the North of England.  He has over 30 years’ experience in residential and commercial development acting for private, corporate, institutional, charity and public sector clients.

This includes site identification, project management of planning and development strategies, valuation and viability appraisals, marketing and sale of development opportunities.

John has specific expertise in Options, Promotional Agreements, Joint Ventures and Conditional Contracts, acting mainly for landowners.  John has been involved in projects such as new settlements, to city centre regeneration, provincial sites, large commercial developments and site sales.

The Development Agency team are currently instructed on 6,500 acres in 150 locations across the North West, Yorkshire and the North East.

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James is Head of the Planning and Development at Carter Jonas and is based out of our London and Oxford offices. James advises clients on proposed development projects throughout the south of England. He has over 20 years experience in residential and mixed use development acting for private, corporate, institutional, charity and public sector clients. This includes site identification, project management of planning and development strategies, valuation and viability appraisals, marketing and sale of development opportunities. He has specific expertise in options, promotion agreements, joint ventures and landowner agreements. James has been involved in sites ranging from new settlements to city centre regeneration and smaller provincial and rural schemes, and also provides expert witness and independent expert valuation services for dispute resolution.

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Matthew has acted for a wide number of Landowner Clients including:

  • Royal Estate Sandringham
  • Crown Point Estate
  • Cecil Family Trust
  • Greene King Plc
  • North Hertfordshire College
  • Cemex
  • May Gurney
  • Pigeon
  • Advice, marketing, disposal and additional tranche disposal of 1,500 unit Residential Development in Grantham.

Project team principle for disposal of the NHC Centre of the Arts, Hitchin, securing a Development Partner and assembling a professional team to progress an application, sale and disposal of a principal asset within the College’s portfolio 

Mathew has over 29 years' experience in the property industry and has been directly involved Residential Development in East Anglia since 1998. He specialises in Land Disposals and Acquisition; Strategic Land, Promotion and Option Agreements. He has acted for a wide range of private and public sector land owners companies including Greene King, Royal Estate Sandringham; Grant Thornton, Pigeon, Crown Point Estate, Cemex (formerly RMC), The Diocese of Norfolk & Norwich and North Hertfordshire College as well as private land owners across the region.

He is Head of Residential Development at the Cambridge Office.

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Steven is Partner and Head of Planning Southern Region and is based in our Oxford office.

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