Are lower land values driving a residential boom?

land values

In his latest commentary on residential planning issues, Paul Walton looks at the land values in the North West and how these are driving forward new residential schemes.

What are conditions like in the North West residential market?

The residential development sector is generally in good health. While there’s always volatility, two parts of the market are doing particularly well.

The big plc housebuilders are benefitting from the fact there’s a glut of sites available with planning permission. This saturated market means land values have fallen, so schemes are stacking up better financially from a developer perspective. We’ve noticed this particularly in parts of Cheshire East and North Preston in Lancashire.

Yes, there are still landowners holding out for bigger values, and people buying up land for speculative development, but most have now accepted that in the short and medium term they are going to have to be more realistic on price per acre.

What are the other development drivers?

At the other end, we’re seeing many smaller bespoke housing schemes coming forward and this is largely being driven by the self-build regulations introduced in 2016. This makes it statutory for local authorities to keep a register of people interested in acquiring land to build their own home and make enough land available.

This has led to us working on schemes for, say, five to 10 homes where the landowner is appointing a planner, an architect and contractor themselves to build them a nice home, but also service the rest of the site.

What are the curent challenges?

The section 106 contributions are still a challenge for developers, but schemes are still stacking up because of land prices being lower than they were a few years ago.

Another trend we’re seeing is the demand for quality bungalow accommodation as people look to buy houses that will meet their future needs. We advised recently a scheme of bungalows that sold off plan almost as soon as they went on the market.

Paul Walton is co-founder and director of North West planning consultancy PWA Planning. To speak to Paul about a residential project call 01772 369669.