The value of land on brownfield sites – that previously used for industrial or commercial purposes – has bucked the trend of falling land prices in the UK by growing 2.1 per cent in the fourth quarter of 2016.
According to Knight Frank’s Residential Development Land Index strong growth was seen in Birmingham. The urban brownfield land market bucked the wider land trend, showing 18% growth over the last two years.
The urban index encompasses sites across five major cities. It is noticeable that pricing in Birmingham has been strongest over the most recent quarter. This highlights how, even with wider economic uncertainties, the prospect of regeneration, potential transport uplifts, and a positive local economic picture, can underpin land pricing.
The UK housing market remains characterised by a shortage of homes in many areas where demand is greatest, and by record-low mortgage rates. However, the movement in land prices also reflects the wider economic environment, especially the uncertainty in the medium-term over the impact of Brexit on the UK economy.
Ian Marris, joint head of Residential Development, said:
“The market for land in PCL [Prime Central London] is showing signs of conditions last seen in 2010 where, after two years of falls, the savvy investors returned to the market and bought in expectation that pricing was reaching the bottom. It is probably a little premature to make the same conclusion however it feels like it is close and we can certainly see value returning to development appraisals.”
Meanwhile, MoveHub, the UK’s leading international relocations resource, has conducted new research to find out which country is best for first-time buyers based on factors such as income and property price growth.
The report cross-references data on the average change in property prices with average salary increases for over 33 countries in 2016 to determine which nation is easiest for people to take their first step onto the property ladder.
Overall, the report revealed that countries with the biggest property price hikes had unfortunately also seen the slowest growth in annual incomes, with some salaries in decline, whilst house prices rose. On the other hand, countries with the highest salary growth enjoyed more affordable property prices or even prices in decline, making them the best places for first time buyers.
UAE took the top spot where average real wages enjoyed a boost in 2016, while at the same time the nation’s property market experienced a slump in value of -7.96%. The recent sharp decline in home prices in some of the country’s hotspot cities suggests that the affordability gap is closing considerably quicker in comparison to other international regions.
Expat haven Singapore also placed among the top five countries for first time buyers, where salaries grew by a generous 3.7%, but home prices continued to drop by 3.37% following the government’s intervention to cool down soaring house prices.
Unsurprisingly, due to the stagnation of wages and unbridled growth of property price in recent years, the UK’s housing market is outgrowing its wage increase. In 2016 the cost of a house rose by an average of 5.7% with salaries only increasing by a modest 2.3%.
Harriet Cann, head researcher at MoveHub comments:
“In general our research shows house prices going up and wages stagnating. What is interesting is that where a government has intervened, like in Singapore, the gap has narrowed, meaning there are steps that can be taken to curb this disparity.”
