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27th Nov 2023|Land|News|New Homes|

Property Development Projections For 2024

The changing value of properties for sale and rent directly informs land use and land value. In-demand properties and locations that are experiencing value increases send a clear signal to developers and housebuilders that purchasers and tenants are interested in properties of this type, in this area, for this price. As such, when we shine a spotlight on how to buy, develop and sell land for residential development, it is important that we understand what property projections are saying about the trajectory of the market. It is always important to pay particular attention to the types of property, price range and location of units that are anticipated to see growth in the future. Here are some of the property development projections for the property market that we believe will impact land values most significantly:

Urban or Rural?

Throughout the pandemic, many renters and buyers began to move towards more rural areas. Without the need to commute into work in an increasingly hybrid, home-working world, movers became increasingly detached from the need to live in busy towns and cities. However, recent trends are suggesting that the appeal of urban areas is on the rebound. As property prices decrease, it has become evident that inner-city properties are more resilient than their rural counterparts, with countryside units experiencing more dramatic price decreases according to research from Savills. However, this ‘shift’ back towards urban living does not mean that rural properties are losing their appeal altogether. 8 out of 10 adults that worked from home during the pandemic still work at least part-time from home, and it seems as if hybrid working models are here to stay, reducing the pressure on urban commuter units in the long term. As such, we don’t anticipate the appeal of rural properties to disappear altogether but to be swung back into a more typical balance between rural, suburban and city locations, especially considering the draw of modern cities for leisure, community and modern living options. 

Flats or Houses?

21.7% of Brits live in flats, whereas 77% live in a house or bungalow according to the ONS. However, the proportion of those living in flats has increased most significantly since 2011, with 500,000 more people living in flats by 2021 than in 2011. Flats or apartments maintain their appeal as they are particularly abundant in busier towns and cities where space is tight. Simply put, the scarcity of development land in these built-up areas lends itself better to building apartment complexes as opposed to a set of houses. pace is more available in rural areas, which makes it better for constructing larger individual housing units and entire neighbourhoods that are better suited for family living – this in and of itself comes with additional challenges, given planning restrictions around greenbelt land and the increasing focus on redeveloping brownfield land via the BLRF’s.

With Britain becoming a nation of pet owners over the pandemic with 3.2 million pets purchased during lockdown, many tenants and buyers are keen to live in properties with accessible garden space, making houses more preferable to flats. Research from the Dogs Trust states that 78% of movers struggle to find accommodation that allows dogs – and it’s not just tenants. Many apartment head-leases prohibit pets for both tenants and purchasers, making houses an obvious choice for many pet owners. 

We also need to consider how the economic situation and relative stability or instability impacts flats versus houses – as mortgage lending becomes increasingly difficult will we see a further increase in the average age of the UK’s first time buyer? And how will the need for Green space factor into the debate too? With Centrick’s recent Love Where you Live research showing that Green Spaces were consistently in the top 3 demands for all renters across the UK developers and landowners need to consider the availability of private and community green spaces as a key selling factor across the board. 

Affordable or Premium Homes?

There is an obvious need for more affordable houses in order to assist ‘generation rent’ in getting onto the housing ladder. Even as recently as 22nd November 2023 current Chancellor Jeremy Hunt pledged an additional £3bn in funding for the Affordable Homes Guarantee Scheme (AGS). With such high demand for affordable housing, developers are also more likely to make a swifter sale on affordable units. What’s more, affordable houses are typically smaller in size, allowing developers to use less land and create a greater quantity of affordable units when compared to premium homes. It’s worth noting that the affordable market is not limited to Sales, with developers of both unitized sale developments, PRS and BTR also beholden to Affordable schemes

However, premium properties still have their place in the property market. Luxury new build homes are more likely to contain energy-efficient features, include bespoke features at the request of the buyer, and generate stronger returns for developers. Furthermore, just as demand for affordable housing is increasing, so is demand for their premium counterparts – for example, London’s premium housing market has been defying the slump in property prices experienced across the rest of the nation. High-end sales have risen by 13% over the past 5 years compared to the 5% decrease in average property sales across the UK.

Looking For Advice From A Trusted Local Land Agent?

Look no further than Centrick!

Our team of experts work with developers across the UK to deliver exceptional residential, commercial and mixed-use developments. With our cross-business expertise spanning BTR to PRS, land to new homes, our team are able to help you understand the very best use for your land that takes into consideration your goals, aspirations and the state of the local market. For more information on how the Centrick team can help you make the most of your development, more detailed property development projections, or for advice on the best use for your plot of development land, download our free land guide below!

Download The Guide - Land: Buy It, Sell It, Develop It

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