The Friday after the General Election, when we woke up to an 80-seat majority for the Conservatives, three and a half years of weak government came to an end. And with it a large dose of determination to do deals has been unleashed.
Nowhere has that been seen more than in the development land market. It’s split between the large deals driven by land-hungry national housebuilders with at least one eye on their share price, and those developers looking to bring forward sites of up to 10 units. Both parts of the market have seen the return of confidence.
The smaller sites, whether the redevelopment of farmsteads or windfall sites within villages, had been delayed during the last few years. Small developers – largely dependent upon their own funds and therefore with high levels of personal risk – understandably chose to step back and bide their time until there was greater buyer certainty.
There’s a definite return of confidence. RICS reported new buyer enquiries hit the highest level since before the Brexit Referendum, and agreed house sales rose for the first time since May last year. Our own residential experts – Hobbs Parker Estate Agents – reported a significant increase in enquiries and transactions.
With greater homebuyer confidence will come increased land transactions, with less need to defend values to help the large or small housebuilder de-risk the deal. Owners should be confident of selling, but the price and option/promotion agreement still needs to be realistic.
Those housebuilders, large and small, with greater access to finance were able to weather the storm and are now well placed to bring forward schemes once they’ve secured planning, and that’s another challenge.
Our own planning team has seen a rise in enquiries, and there’s been progress with a number of Local Plans, so it appears all parts of the market are now starting to move. Which is good news for everyone.