The
value of prime central London residential development land fell by 2% last
year.
Values were static for three consecutive quarters, following
dips at the start of 2019, according to Knight Frank’s residential land index.
It follows an annual decline of 5.6% the previous year, and 2.1%
the year before.
Knight Frank said land values in prime central London have
bottomed out, with a shift in developer sentiment, following the general
election.
Across the country, greenfield land values fell 2.5% and urban
brownfield was down 0.2% during the year.
While Knight Frank was optimistic about upticks in the
near-term, the agent predicted challenges towards the end of the year.
Justin Gaze, head of residential development land at Knight
Frank, said: “While political uncertainty has undoubtedly diminished, and early
2020 has seen positive sentiment by land buyers across all market sectors, the
eventual terms of Brexit persists as a live issue.
“In the short term there is strong demand for land but in the
face of limited sales price growth of completed units, increasingly constrained
by affordability and upward pressure on build costs, buyers are reducing their
margins in order to secure opportunities in a competitive market.
“We anticipate that, as we get closer to December 2020, the more
cautious and price-sensitive the market will become.”