Residential Land Values in Outer London

When it comes to outer London and residential land, we see a number of variances. For example, in Ealing and Hounslow, the end-product market has been very slow. Because of this, the overall market is now experiencing some uncertainty, specifically for land. Even so, for developers to continue building flats and houses, they must have land. While sites are still being sold and transactions completed, land values are not going moving. The good news is that any sign of collapse is non-existent. The only real exception is for Feltham where the town centre redevelopment could become a primary interest for developers of residential land.

Even in Barnet, Haringey, and Enfield, the number of land sales, regardless of size, are few. For transactions that are being completed, the majority are for Brownfield sites or small infill plots. The trend we see in these regions of outer London is that even during a time when planning is uncertain or Brownfield sites mean the high cost of cleanup, buyers are still willing to buy land. Therefore, the slow down of the housing market has yet to affect land sales.

Now for Croydon, Bromley, and Sutton regions, ongoing pressure is for and existing single home located on large plots of land to be destroyed so a number of single homes could be built in its place. While all of these regions are experiencing this type of pressure, Bromley is the greatest affected. What experts believe will happen is that this type of development will fall below where affordable housing is required.

In addition, pressure is being felt for the development of back land. In this case, planning consent is being granted specific to access through narrow gaps that go through established frontages, which would include tertiary or back shopping streets. If you look at the larger sites of Aquilla Bickley Kent, construction of some 280 new homes of various styles is underway. The goal here is for this massive site to meet some of the affordable housing demands.

For the areas of Greenwich, Lewisham, and Bexley, the majority of developments are from acquisition of historic land. Even so, interest levels are high in these types of areas, specifically those overlooking the Thames River. Interestingly, while residential land is being sold, no confirmed sales are reported. In fact, with the slow down of residential sales now being seen, land values will remain static at best. In addition, with variables for macro economic and political changing, values will likely be affected negatively further.

Three other areas of outer London reported include Harrow, Hillingdon, and Brent. The report that for the sales occurring, most are for apartments or flats but only in developments deemed safe and secure. Additionally, the number of second hand homes has begun to slow down. Even so, overall prices are staying level. Because of this, the demand for infill plots and small sites continues. We have also seen a slight demand for garden and home extensions. However, for larger sites, demand has been quiet although prices are not declining.

Then for the areas of Dagenham, Barking, Redbridge, Havering, and Waltham Forest, the past year have seen a significant slow down in the housing market. In addition, sale values have been static for the past six months. The area that has stayed strong relates to "good" building land but even here, values vary dramatically. In the past six months, the number of land sales has been few. Of those reported, most are flat development land and small infill plots. However, because of the low supply of land and growing number of urban population, values are rising.

Finally, for the outer London areas of Richmond, Merton, and Kingston, no direct sales have been reported. For earlier land purchases, these appear to be for the developments in the course of construction. However, these smaller schemes are not influencing the affordable housing market. We also see second hand housing reaching a standstill with slight declines. The bottom line is that the housing market is uncertain. Then when you consider costs for construction are increasing, experts expect prices for land will stay static or possibly drop should demand for affordable housing grow.

- James M

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