West Midlands resi land prices show 5.5% annual growth – Knight Frank

PROPERTY consultancy Knight Frank’s residential development land index research report has revealed that there has been a 5.5% rate of annual growth in land values in the West Midlands.

The firm says values in the region reflect the increasingly confident speculative residential development market.

Land values are up across the country with prices in England and Wales as a whole rising by 1% in 2014’s second quarter.

Knight Frank says this increase underlines the return of investment interest in the market.

Despite outperforming the national average, however, the West Midlands is still trailing when compared with the North West at 6% and East Anglia at 6.1%. Greater London is soaring ahead at 14.2%.

The report says pressure is easing on the major housebuilders who, thanks to the changes in the planning regime and rising buyer demand, are reporting an increase in sales volumes which will help to drive up land values more.

David Fenton, head of regional land at Knight Frank, said there is a level of pent up demand in the marketplace which is set to grow.

“The simplification of planning laws and the introduction of buyer’s initiatives have triggered the welcome increase in construction activity which is at its healthiest level at any time since the downturn,” he said.

“We have to be aware though, that it will take some time for supply to catch up as construction is only now creeping back towards pre-recession levels.

“London’s boom may actually work in the region’s favour too, though, as speculators and investors are sceptical as to whether London can provide the returns they are looking for and buyers are unable to get a foothold on the ladder. Both are looking elsewhere for opportunities.

“With HS2 in the pipeline, Birmingham is certainly being recognised as a prime market.”