Prices for prime London residential land have stopped falling for the first time since September 2015.
According to Knight Frank’s Residential Development Land Index, there are signs that some investors are looking to return to the capital as they perceive more stable pricing in the sales market.
London prime values have fallen by 14% since Q3 2015.
Meanwhile, growth in urban residential land values in key cities and outer London has continued, though at a slower pace than previously.
The pace of annual growth in the urban land market has eased to 3.9%, down from 13.4% in Q1 last year, while quarterly growth was 2.9%. In total, regional and outer London land values have risen by 21% since the beginning of 2015.
Knight Frank said a key consideration for land values is the continued rise in construction costs, which are prompting a revision to development economics and appraisals.
Alongside this, for greenfield sites, there remains uncertainty over the future of Help to Buy beyond 2020.
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