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New Developments and Land

All housing developers have re-trenched enormously over the last four years and those that have survived are much leaner and very careful indeed in making their appraisals and setting Market Values. Speculative construction is at just about its lowest level in recorded time and there is a fairly good argument to state that housebuilders are only continuing to develop sites because that is what they do.

Housebuilders are only really interested in the best parcels of land and then are likely to bid only after prolonged investigation and on a conservative basis. Any sites with problems, or even of a mediocre type which would have been snapped up at high prices in 2006, will probably not sell. Valuing residential land has become a very inaccurate process and can only really be achieved with a great deal of knowledge of what the eventual development will be, the tenure mix, the costs etc. The notion of using comparable transactions is now confined to the history books where land is concerned quite simply because there are none.

In the North of England, the proposed changes to the Section 106 Agreement basis whereby developers will probably not be obliged to offer units for affordable housing or the obligation will reduce will have little or no effect. It certainly will in the South East, but anywhere else, except for the very best sites, developers are very keen indeed to have a housing association on board right from the very beginning, a little to ensure that they get the planning consent they require, but mostly to underpin their cash-flow.

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