Conflicting information from this article to the one below. What are people seeing with regards to land prices currently?

From what I can see only agricultural land is rising at present.


http: / /www .building .co .uk /story .asp?sectioncode=284 &storycode=3120639 &c=2


Residential land values dive 20% in six months
19 August, 2008

By Joey Gardiner

Savills research reveals land values falling four times as fast as house prices - with a further 25% fall to come

UK residential land values have tumbled by one-fifth in the first half of this year - falling at four times the rate of cuts in house prices.

Research from estate agent Savills found that greenfield land in the UK lost 22.5% in value, with brownfield sites losing 19.8%. It predicted that values will fall a further 25% before bottoming out during 2010.

However, prices in the North of England fell even faster, collapsing in value by almost 40% over the same period.







Barnes: "We could see worst-case falls of between 40% and 50%."
Most of the price falls came in April-June, as the sudden squeeze on mortgage finance began to take hold, putting immediate and severe pressure on house prices. The fall in values has happened at four times the rate of house price reduction, with house prices down only around 5% in the first six months of the year.

The agency said that the falls were so steep because land was traded like a commodity and had risen so sharply in value over recent years.

The falls follow a very steep decline in the volume of housebuilding in the UK, with all listed builders halting purchases of new land in most circumstances. However, the sudden lack of demand may hit builders again as they are forced to write down the value of land on their balance sheets, making their financial position even more precarious.

Low land prices mean it is much less likely for developments to come forward, as landowners have no incentive to sell.

Yolande Barnes, director of research at Savills, said: “This is undeniably a period of falling land values, but there is a shortage of development land in many areas that will remain a fundamental factor driving land values over the longer term.”

The report says: “The ability or otherwise of owners to hold their land banks through this downturn will dictate the depth and pace of falls and, ultimately, the nature of the recovery. Where there is no market other than forced sales, we could see worst-case falls of between 40% and 50%.

“We have seen, and continue to see, significant writedowns in the value of land holdings. Additional, downward pressure is coming as the market anticipates the potential for widespread forced sales at discounts to book value.”

One of the reasons is that developers that have land secured in their land bank are not proceeding to use it, but holding on to it for future use when the market improves. Naturally, the big players are not buying land at the moment, because they haven't much use for it. Some smaller builders are actually trying to sell land held in their land bank, just to make ends meet. As with the housing situation, there is a situation developing where there is more land than buyers, so the usual supply and demand influence takes effect on values. Then tie-in the fact that government is changing the playing field, as it were, by relaxing planning consent, making more once prohibited land available ... and we have a bit of a domino effect, with prices spiralling downwards.

I personally wouldn't invest in land right now unless it is an exceptional piece of development land with building consent, but then the premium for this type of land is usually too high, so rarely worth buying. Just like the residential sector, we seem to be in a wait and see scenario.