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Land prices in the Midlands’ top residential addresses have increased by 15-20 per cent since the start of this year.

wantspacegotspace.co.uk - Land prices in the Midlands’ top residential addresses have increased by 15-20 per cent since the start of this year.ccording to development experts at CBRE, the hike is largely as a result of the government’s Help to Buy scheme, which has dramatically increased the number of house sales and consequently prompted volume housebuilders to acquire more land.

Adrian Willet, a director in the development team at CBRE in Birmingham, said: “Help to Buy has been a genuine game-changer for the housing market. This initiative is to volume housebuilders what Quantitative Easing has been to the UK economy. In the three months since it was launched, regional housebuilders’ land buying sentiment has improved enormously.”

In the last few weeks Taylor Wimpey, Galliford Try, Redrow and Barratt have all reported improved revenues, profits and sales, and all have acknowledged the role of Help to Buy in turning around the housing market.

According to Mr Willet, the increased appetite for land is now fueling land price growth.

“Land prices across the Midlands have been moving steadily upwards over the last two years, typically by between 5-10 per cent year-on-year in the better addresses. However, we have seen this extraordinary inflation in the last two quarters, which is principally down to Help to Buy,” he said.

The uplift is not universal, however. Land prices in pockets of the region continue to flat-line.

Mr Willet said: “We are back to very strong values in the top addresses, fair value in secondary locations and under-performance in tertiary areas, where housing demand remains subdued.

“It’s actually quite difficult to compare sites, as there are so many variables, but there is an upward trend in process. However, seasoned land-buyers around the region are saying that, for the first time since the downturn, housebuilders are now confident of sustained house price inflation, underpinning their land buying strategies and overall business models.”

However, there are concerns among both academics and practitioners that Help to Buy may have created a false dawn.

“There is no doubt that it is an artificial stimulus. At what point does it become safe to phase it out? Three years as planned, or will it need longer? If recovery in the housing market is finally here and Help to Buy is the catalyst, it’ll take a real act of bravery for the Chancellor to pull the rug,” said Mr Willet.

Posted by The Editor (wantspacegotspace) on 20th July 2013 (updated 29/07/2013)

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