Thursday 16 May 2013

Residential land price crash

Savills Research has come up with some figures on residential land prices which give a truly shocking picture of the real state of the UK housing market.

Apart from London, all urban areas in the UK show land prices collapsing by at least 38% with an average of over 50% declines.  In the North, the falls are over 70%.

The story of the housing market over the last few years has been of asking prices remaining close to peak values while the market struggles with very thin volumes.  Comparing data for house prices with land prices shows why volumes are so low.  Houses are now changing hands at prices way above the true clearing price that a functioning market could sustain.

At some point, land values and house prices will need to come back into alignment.  The government would very much like this to be caused by a recovery in land prices, but these figures show just how improbable this is.



Region
Greenfield
Urban
London

1%
South East
-26%
-52%
South West
-28%
-38%
West Midlands
-28%
-53%
UK
-32%
-53%
East of England
-36%
-61%
Scotland
-41%
-44%
East Midlands
-45%
-62%
North
-58%
-73%


Source: http://www.savills.co.uk/research_articles/141274/146005-0


2 comments:

  1. And yet we continue to hose taxpayers' money onto builder's balance sheets to help them shift newbuild at top dollar.

    ReplyDelete
  2. Yes it's a complete waste of taxpayers' money and only prolongs the inevitable.

    ReplyDelete