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Property Market Report July 2006
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Property Market Report | Residential Building Land Report |
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Residential building land reportContents - Wales - Scotland This report covers the period 1 January to 1 July 2006. Land values over this period have generally remained stable, although some areas have seen modest increases, particularly those that have traditionally experienced lower values. This appears to be a result of displacement of demand from the traditionally higher value areas. The number of transactions continues to be at a reduced level compared with recent years. In particular, the number of bulk areas of land sold is very low, although with strong demand for those that do become available, prices remain buoyant. Demand also remains strong for smaller plots. The number of flats and apartments under construction remains high, with the suggestion in some areas of an over supply. In many cases a more optimistic housing market and rising densities have counteracted rising affordable housing quotas. It is also necessary to recognise the impact of increases in building construction and insurance costs, allied to more rigorous Building Regulations and Health & Safety considerations, together with environmental and contamination factors. The analysis of site sales on price per hectare is less of a guide to market values than it used to be, because of permitted densities of developments varying widely. The prices achieved for development land therefore more usually reflect the accommodation for which consent could be obtained rather than the size of the site only. The Government is currently considering representations received during the consultation on Planning Gain Supplement (PGS). It is understood that the intention is for the Chancellor to make a further announcement during the November Pre-Budget Report. Planning Policy Statement (PPS) 3, is still in draft format following a consultation period. PPS 3 aims to relax some planning rules regarding housing, so as to assist in the delivery of an increase in the number of houses built each year from 150,000 to 200,000 by 2010. The impact of Government decisions on PGS and PPS 3 on supply and demand for residential land, and consequently price, will no doubt take some time to filter through to the market.
EnglandThe number of transactions has reduced but the sales that have taken place tend to show increases rather than falls in value. Incentives continue to play an important part in the sale of new houses as developers seek to increase cash flow. Local authorities are much more conscious of the need to develop social housing and most now require this to be part of any large scheme. Some builders are halting development on some sites due to lack of interest but this has yet to be reflected in land prices. The market for land continues to show a ripple effect out from the main conurbations with, for example, Blyth Valley having several new sites that will support the Tyneside conurbation. The supply of sites for developments of flats, particularly on Tyneside, is still in excess of demand and the future prospects for this sector are not as attractive as for other general developments.
In the Lancaster area there have been few sales of note during the period covered by this report, with little residential land on the market, possibly as a result of the moratorium on the granting of planning permissions for residential development Although there is no explicit evidence to suggest that residential land values have fallen, it is suggested that developers are currently more circumspect with their bids. In the past developers were prepared to overbid in the expectation that rising house values would still make the schemes viable The availability of land for residential development within the Lake District National Park is limited as the Planning Authority are imposing conditions of affordability and/or local occupancy. Local developers suggest some of these proposals may be unviable. Outside the National Park limited evidence suggests no change in values over those reported in January 2006. Values in West Cumbria are still considered to be very conservative in comparison with other areas in the North West.
In the Preston and East Lancashire areas the supply of land coming on to the market is very limited due to the moratorium on the granting of planning permission for residential development. House prices have stabilised and this has impacted on land prices as developers become more cautious. There is a suggestion that the moratorium may be relaxed in the near future and this is reflected in increased prices for land sold with the benefit of ‘hope’ value. Within Greater Manchester there have been few transactions, with most of those occurring being typically, small infill plots ranging from one-eighth to one-fifth of a hectare, with permission for three or four storey flat development, in suburban locations. Prices are high with, for example, two such sales in the Rochdale area at circa £3.2 million per hectare and £3 million per hectare respectively. These prices reflect high densities of approximately 110 to 135 flat units per hectare. The overall trend within Greater Manchester remains generally upwards, with land for flat development, assuming typical planning permission requirements for the area, moving ahead of prices for bulk land with permission for lower rise development.
Within Manchester city centre, there have again been fears raised about possible oversupply of flats, especially of the two bedroomed/two bathroomed type. Some builders have expressed concern about the limited size of ‘land banks’ and the need to identify sufficient new sites. There is clearly doubt as to whether previously developed land will meet future requirements. There have been a small number of land sales incorporating ‘affordable housing’ provision, but no pattern of values is yet developing. Impact on value depends very much on site location and whether lower specification build costs can be applied to the ‘affordable housing’. There have been few transactions of land for residential development in all four Cheshire local authorities during the report period, with the limited evidence suggesting that the market has remained fairly static. Good quality residential land remains in high demand and the main issue appears to be an imbalance of supply and demand, further influenced by planning restrictions on new development across much of the area. Smaller developers appear to be looking at redeveloping existing residential sites and creating plots from existing garden land where possible. In the rural districts there appears to a high proportion of barn conversions in progress. Small plots are scarce.
There have been few transactions in Liverpool and surrounding areas and those occuring typically involve the local authority and/or housing associations. A planning moratorium remains in place in some of the better areas of Liverpool, whilst in other areas developments with a high proportion of social housing are common. The limited evidence available suggests that land values have remained stable over the period. The Local Authority in St Helens is seeking to limit the number of residential developments for private sale. However, the Local Authority would look favourably on developments with a significant proportion of affordable housing or social housing. The majority of sales of residential land has therefore been between the local authority and housing associations. There is now considerably more interest in modern purpose built apartments in St Helens. Although there have been limited transactions of residential land recently, the increased interest from purchasers in purpose built apartments has had a knock on effect on the land value for flats and apartments. This can be seen in the purchase of the Knowsley Road site, in a good area of St Helens, by Bellway for apartments at a price of over £2m per hectare. South Warrington still has a planning moratorium in place and therefore no new developments have commenced, or are in the pipeline. However, a large amount of residential development is taking place within north Warrington, although there have been very few transactions in the report period. It is anticipated that a rise in land values could occur as more land becomes available. In Halton, the Local Authority holds the majority of land available for development and therefore to a large extent controls the market for development.
The market for large sites in Barnsley and Doncaster is fairly quiet due to the lack of sites available at the present time. However, the few sales do show a continued increase in value as the competition for them is strong. The continued planning guidance on densities remains a factor in the valuation of the sites. Demand for small sites remains very strong and the prices have shown a continued upward trend mainly due to the heightened competition for them from larger builders. Historically larger builders would have shunned such sites, but they are now interested in them due to the lack of larger sites. Values in Harrogate remain static with the continuing perception that apartments are in over supply. Limited evidence is available in Rotherham, although demand would be strong if land was available. It is understand that a number of planning applications are pending on brown field sites in Sheffield
Across Lincolnshire, although prices have generally remained static, there are ‘pockets’ of interest in certain areas with stronger demand leading to higher prices. These tend to be urban ‘landmark’ sites such as the Louth ‘Riverhead’ area or West Street in Grantham, where an urban regeneration project is underway. However, overall the picture is one of slow sales and limited demand, with purchasers still showing caution and vendors having to be sensible in terms of asking price. Single speculative or self-build plots seem to be selling steadily across the region, albeit at a more realistic level of price than perhaps a year ago. There are few transactions within Northamptonshire to indicate changes in levels of value of residential land from January 2006. Higher density development of brownfield sites is occurring as a result of policy encouragement by DCLG. This has lead to higher land values particularly in relation to sites with planning consent for flats in urban locations.
Development is concentrated to the north of the County in Corby, Wellingborough and Kettering. 5100 homes are being built by Bee Bee developments on a regeneration site in north Corby called Priors Hall located to the east of the Rockingham Speedway Stadium. Bovis Homes have plans to develop a 87 hectares residential site at Stanton Cross, Wellingborough. The impact of affordable housing on residential land values is still difficult to quantify. Demand for residential building land in Leicestershire remains strong. Leicester now has a considerable stock of modern student accommodation and apartment developments close to the city centre, in advance of Regeneration projects underway to attract new employers to the City. The market for residential building land in Derbyshire has remained fairly static since the turn of the year. The predominant trend has been the sale of single plots and smaller sites of less than a hectare. The values of these types of sites remain particularly high in good residential and rural village locations. Sales of bulk areas of residential building land are more scarce with the sale of the site of the Derby College site at Wilmorton to Barratt Homes in November 2005 being the last of significance. The general picture across the County is one of a fairly static market with relatively few sales and no significant increases or decreases in levels of value. The impact of affordable housing policy on land values is difficult to analyse. Land transactions in Nottinghamshire mirror those of Derbyshire with the sale of smaller sites and plots being more prevalent. Within Hereford and Worcester all of the local planning authorities have policies that assume relatively high percentages of social housing, although all differ in exact requirements with the percentage largely dependent upon the amount of available land stocks. Hereford town centre is scheduled for extensive redevelopment over the next 10 years. It would appear prices for land in the vicinity are increasing as developers and speculators acquire sites in anticipation of the detailed scheme being finalised. The demand for residential developments sites for houses and flat schemes is still at quite a high level across the Sandwell area, with the majority of these being brownfield land. A shortage of supply, and strong demand together with planning policies favouring increased densities has led to value levels being maintained. The value of brownfield land has increased, however these values are site specific, and are affected by any remediation and abnormal costs required to develop the site. The requirements of any affordable housing, and Section 106 agreements will also affect values. Sandwell Metropolitan Borough Council have recently agreed sales on some sites in Smethwick in excess of £2.5m per hectare. However, these prices are site specific with no, or very little, requirement for affordable housing, and no or limited, abnormal costs. The type of design that the Council requires has also influenced the price paid. The market in Wolverhampton is perceived as relatively quiet with few sales. Shropshire has seen very few sales, with those that have occurred being of smaller plots, with those in attractive villages being in particular demand. Prices are site specific with large variations. These sales are difficult to analyse but it is felt affordable housing has had an impact on values. North Shropshire District Council is understood to be seeking up to 40% social housing in respect of future planning permissions, with South Shropshire having a policy of 50% affordable housing. The availability of land is hard to assess although some larger builders are apparent in the market. There is still demand for sites in Shrewsbury with River Severn frontage. Affordable housing is having an impact on values as builders have to comply with the Council’s recently tightened policy. The residential building land market in Staffordshire is generally very quiet with limited numbers of completed sales. Within Newcastle-under-Lyme there is still interest in the development of flats, but due to the number of potential sites in the pipeline the market has been quiet. The developers of two sites (approx 100 apartments each) have scaled down their proposals by approximately 20% after previously being refused planning permission. These have both now been granted permission subject to agreement of planning obligations. One developer is however still proceeding with a planning appeal on the original refusal. A number of sites are on the market in Stoke-on-Trent with permission for apartments, but with limited demand few sales appear to have completed. The market is still uncertain outside the areas covered by the regeneration proposals of Renew North Staffordshire. No development is being allowed outside of these regeneration areas so as not to divert efforts away from the regeneration scheme. Within Birmingham there are few sales that do not include S106 agreements and affordable housing obligations. There are still a number of mixed-use developments that are being encouraged by the planning policy. Indications are that the demand for residential developments sites for houses and flat schemes is still at steady level across the Birmingham area. However, there is a suggestion of an over supply of apartment properties within Birmingham as a number of large projects become complete
There is very little transaction evidence in Suffolk with larger developers continuing to work through their land banks. Similarly, in Norfolk, sales evidence is very limited and generally restricted to small infill plots. The suggestion is values may have increased slightly in line with the increase in residential property values in the first half of 2006. There is very little market evidence of sales of residential land in Peterborough, Fenland and Huntingdon. Demand for individual plots has remained static, however good plots are in decreasing supply and this can lead to good achieved prices. A few significant sales of bulk land on the northern boundary, and in a near central location, indicate that values in Cambridge are still rising steadily, particularly for higher density housing and flats. Whilst there is limited evidence of land sales in South and East Cambridgeshire, both areas benefit from direct proximity to Cambridge and it appears values have risen accordingly. There is very little evidence available to support any change in values in Bedfordshire and Hertfordshire.
As with much of the rest of the region, there are generally few transactions in Essex, and those that do occur are mainly of smaller plots. Modest movements in the housing market generally, together with a shortage of good sites, keep values steady. In several towns such as Saffron Waldon, Chelmsford, Southend and Brentwood evidence shows strong demand for flats, especially in town centre locations, which have led to increased values. Further, the perceived pressure from expansion along the M11 corridor indicates higher prices for all sizes of land in Harlow and the continuing interest from the East of London suggests a modest increase to land values in Grays. Planning applications have been made for several medium sized sites in Maldon town centre. Whilst no sales have yet occurred, the suggestion is that strong demand will lead to price increases in the future. There is a suggestion that the lack of requirement for a social housing element on smaller sites is maintaining demand and assisting in the sale prices of smaller plots, but that larger areas with a social housing requirement are of less interest.
London Generally Again there have been few recorded transactions across London, however there is development taking place, and there are several large sites of surplus hospital land that have been sold. One of these had an historic planning consent without affordable housing requirement, and another major site, whilst having residential consent, was purchased for existing use as a hospital. Valuation of residential sites remains a difficult exercise, and several factors combine to complicate the issue of residential land value in any site specific context, and it is important to place that caveat on any generalisation. Varying affordable housing quotients, Section 106 Agreements and the availability of Social Housing Grant all appreciably influence land value – the values indicated do not reflect widely variable off-site Section 106 terms, but do reflect the general level of affordable housing applied in Inner London Boroughs (35% in developments comprising 15 units or more, moving steadily towards the 50% quoted in the Mayor’s London Plan). Levels of affordable housing are rising progressively, reflecting both housing need and the political pressure of the London Plan. To date central and local governmental pressures fuelling higher densities have counteracted the negative effect on land values that might have resulted from rising affordable housing quotients. Inner London Boroughs have responded to the political pressure and housing need mentioned above, rarely refusing scheme applications on density grounds alone and instead adopting a broader approach incorporating design quality, accessibility, parking and amenity requirements. These factors and the Mayor’s London Plan have influenced densities far more appreciably than local Unitary Development Plans in recent times. The general view, however, is that developers are taking a cautious and selective approach to development proposals. Also there is a feeling that the increased development costs may have a negative impact on site values, particularly when combined with ever increasing requirement for affordable housing.
There has been no evidence of sales of sites in Maida Vale and Paddington in the last six months, but there has been increased activity in the residential market with corresponding increases in the value of both houses and flats. This will eventually lead to increases in land values as the Gross Development Value of these sites increases. However since developers and others hold onto their land banks during lean times there is often a time lag before increases in property values lead to an increase in land value (during this time land held onto is developed before more land is purchased). An increase in land values would be expected if the residential market continues to improve. In Kensington and Chelsea there is no direct sales evidence of residential sites for the reporting period. The market in second hand properties has risen over the last six months, particularly over the last three months – and it would be expected to see increases reflected in land prices for the next reporting period provided the market remains buoyant.
In Hammersmith, again there is no direct evidence - the market is rising for second hand properties and provided this continues it would be expected this would feed through to land values in the next reporting period. Values remain unaltered for the current reporting period. In Hackney, Islington, Newham, and Tower Hamlets the housing market has now recovered its momentum, after a relatively stable period. This has to some extent restored the confidence of developers, reducing their inbuilt risk/profit share and potentially inflating sums available to bid for development land. Mixed-use schemes are increasingly prevalent, partly dictated by planners’ requirements and partly by developers spreading their risk. Disposal of redundant Local Authority and Hospital land particularly promotes this type of scheme, often with the inclusion of a socially beneficial land use, such as, health or education, by virtue of Section 106 or otherwise. Whilst geographical and site-specific considerations will inevitably cause variation, the general trend over the course of this year has been one of stability in the residential land market as a result of the delicate balance discussed above. In Lambeth and Southwark the market price for residential land has shown a huge jump in the parts of Lambeth and Southwark that are closest to the centre of London. Residential densities much greater than those allowed in recent years are now being permitted; these are being achieved by such measures as the reintroduction of high-rise developments (eight storey blocks are now becoming common, with ten or twelve stories on some sites) and the reduction or removal of any vehicle-parking requirement. This would appear to be a response to requirements for affordable and key worker housing, which can be up to 50% of new developments, and pressure from the GLA for more housing in London. The analysis of site sales on price per hectare is less of a guide to market values than it used to be, because of permitted densities of developments varying widely across Southwark and Lambeth. The prices achieved for development land therefore more usually reflect the accommodation for which consent could be obtained rather than the size of the site only. In Wandsworth there has been one large site sold, which attracted a lot of interest, but it had the benefit of an historic planning consent, which had no affordable accommodation. This achieved close to £12 million per hectare. Otherwise, the few sites that have been sold are small infill sites of around 0.1 ha, and no clear pattern has emerged. The second hand market has shown some signs of movement, and one would expect this to be reflected in site values in due course.
In Barking, Walthamstow, Chadwell Heath and Romford there have been few sizeable land transactions to report within the last six-month period. Small sites and infill development sites, however, continue to attract a ready demand, with prime sites generating high transaction values. There is a requirement to increase social housing content within larger schemes in all the boroughs and greater building densities are being considered, particularly within “urban” locations.
The general market however is more buoyant than six-months ago, but developers are still cautious with purchase bids, and certainly are not projecting enhanced end sale values when bidding for sites. In summary, a cautious market, but with a small increase in average values since January 2006. In Hounslow and Ealing continuing strength in the final product (i.e. houses and flats) means that land is in demand. Values are still steadily driven up as developers compete against each other to have somewhere to build. On the supply side there are limitations because so much has already been developed in the last ten years and also because the planning system is deemed to be too restrictive by developers. Affordable housing is demanded at around the 15-20 unit level of development; with 50% required for developments above this size. This causes something of hiatus in the market because social housing requirements create effectively dead value. Accordingly the small sites, which require no social housing, and the very big sites which can accommodate it more easily are benefited. The prime areas of W4, central W5 and riverside developments continue to be most attractive
In Enfield, Barnet and Haringey, the majority of development opportunities coming to the market within these three boroughs continue to be brown field land, infill sites and redevelopments of existing properties. There is a strong trend towards replacement of large, older properties on generous or under utilized plots with high density developments. As noted previously, planning permissions for very dense developments push up land values per hectare and this is reflected in the wide range of sale prices achieved. Although conclusive evidence is scarce, anecdotal evidence suggests a slight increase in values; this is reflected in the uplift in reported figures. The dearth of large development sites means that the requirement to include affordable housing impacts mainly on the larger developers. In Brent, Harrow and Hillingdon a very few known deals have in turn only polished the value of land upwards in these locations although demand appears to be very strong. As always, sites with pre-attained permission will command the highest values, and landowners are more willing now to seek planning approval prior to sale. Developers will seek out both land sites and conversion opportunities with equal vigour. Smaller sites, without onerous affordable housing requirements, are very popular, and also very lucrative to the smaller housebuilder with exclusive or luxury dwellings still highly sought after. With fewer large sites available for redevelopment, developers are keen to secure land or hold on to sites for as long as necessary, taking longer term views on redevelopment. In Kingston, Merton and Richmond there is limited evidence, though the second hand housing market has shown some growth, and in due course this should be reflected in the values of sites. In Wimbledon a large hospital site with planning consent for conversion and residential development, did attract interest from housebuilders, but eventually sold at existing use to a special purchaser. Increased construction costs, and the growing pressure for affordable housing is expected to keep land prices relatively static, though small sites for flats or individual houses can be expected to command premium prices. In Bromley, Croydon and Sutton the demand for prestige mansion sized houses continues, and developers are still purchasing large houses for demolition and replacement. Where the opportunity exists for a site assembly of up to four houses, these tend to be developed at higher densities, particularly where long rear gardens allow creation of a Close layout. The benefit for developers is that there is no onerous affordable element to consider. Close to Bromley town centre there is a flurry of commencement of new purpose built blocks of flats, on land previously acquired. In Bexley, Greenwich and Lewisham, land for development is continuing to sell, with housing associations and builder/developers both in the market to buy, and local authorities prominent amongst sellers. Despite the pressures on affordable housing, the general view is that values have certainly not fallen.
Within West Sussex, two sizeable development sites at St Richards and Grayingwell hospitals, Chichester, have now been sold. A further site is being developed south of the Chichester bypass in the Stockbridge area, which will see a considerable amount of further development once the bypass is improved. There appear to be few opportunities for development in Adur as both Emerald Quay and Ropetackle have completed. A similar lack of opportunities for large scale development exists in Arun, where the planning application by Ling Homes and Wimpey for a four hectare site at Toddington has been turned down. There is still strong demand for infill single building plots. A number of schemes are likely to materialise in the very near future in the vicinity of Ifield, close to Crawley. Brownfield sites that become available in Horsham are in strong demand and sell quickly. There is also very strong demand for individual plots on infill developments. Due to the partnership between Mid Sussex District Council and Thornfield Properties, the Mid Sussex towns of Burgess Hill, Haywards Heath and East Grinstead could be the subject of comprehensive town centre redevelopment including the provision of additional housing. The application on the Teville Gate, Worthing, site has now gone forward. There are still very limited opportunities for development and where redevelopment takes place it is usually in the form of sheltered housing. Within The Medway Towns area, Persimmon Homes has acquired a large disused quarry on the edge of Strood and obtained planning consent for 147 units. Further development has occurred at St Mary’s Island at Chatham Maritime. There have been numerous sales of single building plots. A school site on the Hoo Peninsula has been sold to national house builder. The next phase of development at Waterstone Park near Bluewater is now underway. Significant residential development is proposed for the Dartford Borough Council/ ProLogis joint venture Dartford Park scheme. Market activity has been limited, although Gravesham Borough Council is seeking to redevelop certain estates. Further affordable housing is earmarked for Meopham. Barratt Homes has acquired a large brownfield site in Maidstone opposite the Leybourne Lakes development. New town centre homes are planned as part of the proposals to redevelop Maidstone East station. Further development in the Sevenoaks area is planned for Edenbridge including a Crest Nicholson scheme adjoining the railway line. Crest Nicholson is also developing the former cattle market site in Tonbridge town centre. Further development is underway at Kings Hill. Tunbridge Wells has seen limited activity although Crest Nicholson is developing a site on the edge of the town centre fronting the A26. Close by, a housing association has acquired former warehouse premises for redevelopment. In the Folkestone area a site in Hawkinge in an edge of town location continues to be developed, helped by the construction of the final link of the by-pass. Hythe has seen several new sites being developed with small schemes for flats. Regeneration plans has seen many new mixed scheme proposals particularly around the urban coastal towns of Margate and Ramsgate. A large mixed scheme is to start soon close to Ramsgate Harbour comprising hotel, retail, leisure and approx 120 residential flats. Ashford is the major growth town in southeast area with several residential development schemes continuing. Within Canterbury a new development/ conversion scheme is underway within the city wall, on the old tannery site, where there is strong demand for such units. Large-scale residential development is also taking place at Whitfield, close to Dover. Regeneration plans earmark several areas within Sittingbourne for redevelopment with mixed schemes. Major residential development is taking place at Milton. It would appear that demand for residential sites remains strong in Berkshire, although evidence is limited There are no sites for large scale development in Oxford City and most development appears to involve the demolition of inter war properties and flat/ apartment developments. There have been a few sales of parcels of brownfield land throughout the rest of Oxfordshire which have shown a small value increase.
Within the Hampshire and Isle Of Wight areas, demand for land appears strong compared with previous periods, despite the general levelling off of house prices, increasing affordable housing requirements and enhanced build costs associated with the government’s sustainability agenda. Strong demand coupled with limited supply is keeping prices buoyant. The successful disposal in December 2005 by English Partnerships of the former Park Prewett Hospital site (34 Ha – 884 units) in Basingstoke demonstrated the strength in the market despite these increased planning obligations. Development continues at Elvethem Heath near Fleet and at Dowd’s Farm at Hedge End (765 units) sold in April 2005 and held up by subsequent archaeological investigations. These large sites will be helping to meet the present bulk land requirement. Land for development in the south Buckinghamshire is restricted by Green Belt policy but there is significant growth planned in the future for the Milton Keynes/South Midlands area identified by the Government to help fulfil the housing need in the South East. English Partnerships are due to launch the UK’s first large scale £500 million commonhold development in Milton Keynes with work on up to 2000 homes with 30% affordable housing, two schools and a commercial centre due to start at the end of this year. Aylesbury has been targeted to provide up to 11,000 new homes over the next 20 years and has been allocated infrastructure money by the Government to provide for Aylesbury Public Transport hub (£14.38 million) and for land assembly in the town centre for development around the canal basin and relocation of the boat yard (£4.03 million).
Within Somerset most sales are of small single or double plot sites. Further, infill development is actively encouraged by planning authorities to help meet their housing targets. As long as plot values remain high, house owners will continue to sell off parts of their gardens and often move on with the profits made. On brownfield sites higher density development is occurring as encouraged by the policies of the DCLG. This in turn has led to higher land values particularly in relation to sites with planning consents for the construction of flats. The price of land is unlikely to decrease unless supply is increased. This is unlikely to happen in sufficient volume to affect land prices. As and when large development sites come forward it is in the interests of the developers to phase the development so as not to flood the local market. Within Gloucestershire, Wiltshire and Dorset competition and demand for sites, both small and large, remains strong. Intensity and type of permitted development along with site specific costs (contamination, s106, access, services etc.) continue to be critical. There is some caution amongst developers concerning proposed PGS and various infrastructure levies/tariffs proposed or now operating but relative scarcity of sites in relation to demand has resulted in prices remaining resilient. Developers report increased build costs but this generally seen as of secondary significance to the above.
The residential building land market has continued to forge ahead over the last six months along the major corridors of the M4 in the south and A55 in the north, but has been less vigorous elsewhere in Wales. In Cardiff, a shortage of suitable sites allied to strong demand has pushed up the value of land suitable for housing, although a glut of apartments in Cardiff Bay has reduced the attractiveness of this form of development in relative terms. Recently a £100m scheme has been announced at Tyndall Street in the city, which will include 675 houses together with commercial uses, and just north of the city in Radyr, Bryant Homes has acquired a 8.9 hectare brownfield former railway sidings site for £25m to build more than 350 homes. In sought after rural Monmouthshire and the Vale of Glamorgan small residential sites can rival Cardiff values. Housing is to comprise an integral part of the redevelopment of former steelworks sites in south Wales, at Ebbw Vale and Llanwern (near Newport), and north Wales at Brymbo (near Wrexham). In Swansea plans have been unveiled for 200 one-bedroom flats as part of the Morfa Village development, a further 564 properties on the former Addis factory site and 120 affordable houses on the old Swansea City Vetch Field football ground. In West Wales (i.e. beyond Carmarthen) and Mid Wales developments tend to be much smaller scale and dominated by regional or local house builders. Demand remains strong but values modest in comparison. .
Within Dumfries and Galloway there continues to be strong demand for individual house plots, but good plots are limited in availability. There are few transactions of larger areas of land. A new housing development is underway at Dalscone, adjacent the Dumfries Bypass but the increased supply of second-hand housing on the market appears to have dampened demand for new-build, which tends to be at the upper end of the market. Land released for development in Edinburgh is heavily concentrated on the brownfield sites along the north waterfront stretching from Leith to the former Granton gasworks. The existing plans allow for up to 30,000 units, mainly flats, over a total area of 140 hectares. However, demand appears to be slackening here possibly due to over-supply coupled with a lack of infrastructure with particular reference to the recent announcement that the proposed Tramline 1 is only to proceed, for the time being, as far as Ocean Terminal on the east side of the waterfront area. The design and mix of the proposed developments has also come in for a good deal of criticism locally. Elsewhere, demand remains significant but values have stabilised due to a cooling off in sale prices of completed units, together with a steep rise in building costs in Edinburgh, which has been particularly pronounced over the last 18 months. The City of Edinburgh Council has simultaneously released the draft Edinburgh City Local Plan (which replaces the 4 existing Local Plans covering the built up area), the Structure Plan Review 2020 consultation paper and the Vision for Capital Growth 2040 document. Taken together, they will go a long way to determining the future of residential development in the Edinburgh and Lothians where high demand is projected to continue indefinitely. Some radical suggestions are made including “spoke” development following the public transport corridors leading into the city. The Affordable Housing policy is under review with a declared intention of increasing the proportion to a blanket 25% across the city. Currently, a ward-by-ward system operates with requirements varying between nil and 20%. McCarthy and Stone Developments have acquired the First Bus Depot in Peebles for at least 21 flats. Development is continuing in Cardrona. Developer interest is strong in Dundee for greenfield sites on the periphery and brownfield sites in central locations. The residential market is strong for all types of housing and there is a large number of central sites being developed with houses and flats at the lower end of the market. Houses at the high end of the market are being developed in “villages” on the periphery and in select areas within the city. The report period saw considerable activity by housing associations for land for social housing and by local builders for land for development of more medium range houses and flats. Within Aberdeen brownfield sites continue to dominate the market but the advent of the Aberdeen Western Peripheral Route for the A90 will encourage interest in greenfield sites in the near future. Planning Authority policies on affordable housing have still to be resolved. Development of greenfield sites on the outskirts of Inverness continues apace. There continues to be strong demand for individual house plots, which are scarce. There have been more sales of land for social housing than in the recent past.
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