Super-prime London land halves in value
Super-prime land development sites in Lonodn have as much as halved in value over the last year, as real estate developers becoming increasingly strapped for cash.
A new report from high-end agent Knight Frank has shown that the previously untouchable super-prime land band, priced up to £100m and over per acre, has received half as much demand as a year ago. However, compared to the rest of the market in the UK it is still the most sought after.
Areas in the country, like Yorkshire and the Midlands, have fared much worse with drops of 49% and 25% respectively.
Jon Neale, head of development research at Knight Frank, said: “Over the past year, developers have put their land acquisition activities on hold, which has dramatically reduced demand for sites – by as much as 60% in some parts of the country."
He added: "At the moment, only well-located “oven-ready” plots with planning permission attract interest, but much of the available land does not fit this description. As a result, any offers are likely to include deferred terms and options."
Charles McDowell, director of Charles McDowell Property, said times are tough for the developers as banks become increasingly selective about financing.
He said: "Many super prime developers can no longer get financing for development costs. There are certain banks that are still lending, like RBS,Coutts and HSBC, in areas like Chelsea and Mayfair, but overall banks aren’t playing ball."
He added: "I had a client in Holland Park who had his site valued; a month later and the land had dropped in value by 5%."
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