60 Second Property Digest – UK residential development land index shows slowing development
Anna Ward, senior research analyst, delves into the latest UK residential development land index report, which shows a perfect storm of challenges for housebuilders as development slows.
1 minute to read
UK Residential Development Land Index Q1 – 2023
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The UK faces a critical housing shortage as delivery remains far short of the governments 300,000 annual target.
In London alone, the number of completed new homes in the first quarter of the year fell below 4,000 to a nine-year low.
But at the same time, housebuilders are facing a perfect storm of challenges right now that combined, are slowing down development.
The Knight Frank UK Residential Development Land Index Report, which surveyed over 40 volume and SME housebuilders, asked what they thought would most challenge the sector over the next few months.
The results of the survey revealed a number of hurdles in the way of housebuilders, including:
Planning delays
At the top of the list of concerns are planning delays.
Uncertainty around national planning policy is also creating uncertainty for builders, developers and planners and several local authorities have paused or abandoned their local plans as a result.
Land availability
Another concern for those in the survey is that there is less allocated land coming forward for development.
This has resulted in more competition for land, making ‘availability of land’ the second biggest current concern for the industry.
Mortgage rates
Higher mortgage rates have also weakened demand.
A third of housebuilders said mortgage availability and cost will be a key challenge for the sector over the next few months, and mortgage approvals remain well below pre-pandemic averages.