Residential Land Values in North East

Throughout the UK, we have seen some definite changes concerning land in the past four to five years. Because of the growing demand and shortage of both residential land and housing, the government is trying to come up with some innovative solutions to trying challenges. Take North Cumbria as a prime example. This area has been quiet pertaining to the residential housing market. However, the Workington Infirmary site is now being targeted for residential development in the next few years.

Looking over to South Cumbria, new residential land development has been slow because of restrictions on planning and a stronger focus on Brownfield sites. Even so, the new residential developments are required to include a decent number of affordable homes in places where prices would be held to a 65% full market value guideline. To meet this requirement, we have seen developers purchasing sites in Kendal and then building flats nearby so they can b converted to the affordable home element.

Then, if you look at the area of Carlisle, we see a strong emphasis being placed on Browfield sites and the goal of turning them into residential development projects. In fact, a number of former industrial sites are already being redeveloped, which covers the area of Shaddongate Mill, currently being completely transformed into flats by a company called Story Homes.

Now, for Eden, local developers are proposing hat the only way to be granted residential development for affordable hosing would be with planning permission. With this, site owners may be forced to accept the value of the land based on this type of development. The site owners other option would be to bank the land because the planning schedule for the future could change.

Two of the areas seeing huge demands for affordable housing include Dales National Park and the Lake District. In fact, the demands are so significant that the Dales National Park Authority is now imposing restrictions of any new developments specific to local occupancy. In addition, applications for residential development within these areas must also include a survey. The impact these decisions will have on the housing market is still unknown. Also unknown is the number and types of developments that will be established.

For the areas of Blackpool and Lancaster, few sales of residential development land have been completed. However, these areas also have a huge shortage of building land and the demand for higher prices continues. Therefore, more sales of this type of land are possible down the road. In the adjacent borough of Fylde, we see a number of restrictions being proposed. The primary proposal relates to 50% allocation of affordable housing but for future developments. Keep in mind that the Fylde Borough Council is considering the building of affordable housing off-site or for a calculated sum to be paid to the Council instead.

For the west and central areas of Lancashire, the local authorities have taken steps to implement tight planning policies specific to residential development. For example, in 2003, the Regional Planning Guidance issued a policy that would reduce the yearly rate of building in the northwest down to 12,700 units from 15,000 units. Because of this policy, any land that goes on the market for sale has significant restrictions placed on it and demand is high.

We see a trend of planners leaning toward schemes that involve apartments in the town centre. In general, these sites are small and many times, former industrial sites known as Brownfield sites. However, a number of local builders are showing interest since values are remaining good. Even with some stagnation of the housing market, chances are high values for land will survive.

All of the local authorities overseeing the east portion of Lancashire are sticking with the strict planning to maintain control over any type of residential development. Therefore, sites deemed acceptable for key or social worker housing is given permission to proceed. Sites that have planning consent or those considered within Housing Market Renewal areas are receiving a lot of interest from regional and local developers. In most cases, these particular sites are marketed by informal tender and in some cases, have been sold for more than the asking price.

One site located in Mill Hill Blackburn consisted of a former garage colony. Being sold on the market, this area looks promising with many experts believing it will easily sell for around £1.8 million per hectare. Considering this area does not present with the highest and value for residential purposes or is in a glowing part of town, this price is quite impressive.

Now, you could look in Roe Lee/Bastwell Blackburn and find a two-hectare site recently sold for £1.4 million per hectare. Interestingly, this area is more pleasing and the site 50% larger, yet it sold for less money. This just goes to show you that with a limited supply of residential development land, price will probably win out.

Next, you could look at residential land sales in Greater Manchester and see that not much is happening. For the few sales that have taken place in the past year, the value has changed little to none. The one change in this area that has been noticed is that the lower value end of the housing market is rising in cost. Even so, top residential development land in this area sells for around £1.2 million per hectare. Greenfield sites are very limited in the Greater Manchester area, specifically to the south. Taking that aspect along with the ongoing high demand for housing means demand in the less favourable areas is decreasing. You will even see areas like Oldham and Rochdale, which have long been known for being lower priced areas, are seeing growth.

At present time, some very large investments from public and private parties are starting to seep into the Greater Manchester area. Additionally, experts believe that more and more good-paying jobs will come to this area from the southeast. To give you an idea, anticipations are that the BBC and a number of governmental agencies will bring jobs to this area. With this, the market at its current selling level will be sustained.

We now look at the Vale Royal, Congleton, and Macclesfield Borough Councils, which are involved in planning moratoriums. However, with few Brownfield sites and values reflecting the very nature of these types of sites, analyzing is challenging. We see some of the same difficulties in the Nantwich and Crewe Borough Council areas where the past three years has resulted in numerous residential developments but for some reason, this is ending.

Finally, the planning authority for Chester specific to residential building land consent has resulted in no new sales falling with Chester city limits. In fact, this area of the UK is seeing a slow down of housing demand. The hardest hit appears to be the flats, meaning there are more flats available than there is demand. Just within the past year, the percentage of affordable housing required on new sites but also where permission by the Council is mandatory has risen up to 40% from an earlier 25%.

Because of this, developers now believe the accommodation mix primarily the premium developers will be impacted. In fact, these developers believe the impact will be so significant that the price of property will decline. However, it is important to understand that insufficient sales to support these beliefs are simply in place to offer support to the theory.

- James M

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