Housebuilders battle for land in primary locations

The supply of residential land for development in desirable locations, particularly in the south of England, is failing to keep pace with existing demand, with competition among new home developers intensifying for the very best sites, according to research conducted by Knight Frank.

With the housing market performing relatively well in the south of the country, led by London, an increasing number of housebuilders are targeting land for the construction of new homes, led by a strong desire to build new homes in London.

However, while demand for residential land remained strong for desirable locations, especially in the south of England, demand has slowed for land in the north, reflecting the sluggish nature of the market.

Grainne Gilmore, Head of UK Residential Research at Knight Frank, said: "In some marginal areas, especially in the North of England, the appetite for sites is negligible, while some are simply not viable given the state of the local housing market."

"The differential between the markets for land in the best locations and land which is poorly situated continues to widen, with agents reporting that the difference between demand levels and pricing can vary from road to road in some areas.

"The very best schemes, including prime sites in and around market towns, especially in the South are still attracting interest and there is stiff competition between bidders. But poorly-located land is now available at heavily reduced prices."