Positive Trends in UK Housing Market for Q1 2024: Housebuilders Active Buyers, Increased Interest, and Stable Land Prices Predicted
Housebuilders are back in the market for land as the outlook brightens, with a resurgence in buyer interest and positive sentiment in the housing market. According to a recent survey by Knight Frank, almost 50% of respondents reported housebuilders as the most active buyers in their regions, a significant shift from previous quarters. Additionally, nearly 40% of respondents reported an increase in site visits and home reservations in Q1 2024, the strongest reading since late 2022, signaling a robust rebound in buyer interest.
Knight Frank’s research revealed that stability in the housing market this year has resulted in sentiment in the land market starting to improve. 25% of housebuilders cited supply as adequate, the highest proportion to date, suggesting improved conditions for land acquisitions and future development pipelines. Furthermore, 65% of respondents anticipate stable land prices in Q2 amid rising demand.
The survey also showed that 50% of housebuilders have sold or plan to sell units into the build-to-rent sector, indicating a shift in strategy to adapt to changing market conditions. However, while deals are underway to replenish pipelines, land is not changing hands at a rapid pace yet. Factors that would increase housebuilders’ appetite for land and new development included interest rate cuts, planning reform, and more support for first-time buyers.
Charlie Hart, Head of Development Land at Knight Frank, commented on the positive shift in market confidence, noting the need for continued policy reforms to bolster investor confidence in the long run.
Despite the positive outlook, challenges remain, with a third of survey respondents citing a lack of power capacity in the National Grid affecting new homes and delays from utility firms. Additionally, with the election looming, 80% of housebuilders and developers expressed a preference for a Labour government to enhance the country’s land and development market.
Anna Ward, Knight Frank Residential Research, highlighted the shift in sentiment with increased sales rates, reservations, and start volumes. She emphasized the importance of addressing concerns such as unrealistic affordable housing targets to boost housing delivery.
Overall, the survey reflects a growing appetite for land acquisition among housebuilders, driven by improving market conditions and increased buyer interest.
