Housebuilders compete for land in stronger-than-expected UK economy

The economy rebounded by 16.9% and 1.3% in the third and fourth quarters of 2020 respectively, according to the Office for National Statistics. This represented increases on the 16.1% and 1% previous estimates.

But a lack of available land and ongoing Covid-driven issues remain a challenge, as reflected by our new quarterly Residential Development Land Index Survey of nearly 50 SME and volume housebuilders.

Land prices were broadly flat across the board in Q1, but if the economic market recovery is sustained, and particularly if supply levels remain low, we anticipate an uptick in land values next quarter.

This sentiment is reinforced by our survey with 55% of respondents expecting an increase in land values and only 7% expecting a decrease.

We surveyed housebuilders across England and asked them about the key issues for the sector, both in Q1 and going forwards.

When asked about the most pressing issues for the industry over the next three months, 21% selected ‘availability of land’, 18% said ‘planning reforms and policy uncertainty’ and 15% selected ‘supply chain delays’.

You can find our full report on the Q1 Land Index and accompanying survey available here.

Photo by Bence Balla-Schottner on Unsplash