Speculative investors are buying up plots of land following a 50 per cent slump in average values in the past year, according to Knight Frank. Wealthy individuals, private equity companies and opportunity funds have been responsible for almost a quarter of recent land purchases.
Jon Neale, head of development research at Knight Frank, says there has been an unprecedented fall in land values across the UK.
Problems with securing finance for development and the lack of housebuilding means that no region has proved immune.
Land values in London, the least affected area, fell by 40 per cent, while urban land in Yorkshire and Humberside suffered the sharpest decline of 64 per cent.
Investment in land is a higher-risk strategy for individual investors and requires a long-term view. “Prices are not likely to come back that quickly,” warns Neale. “In the last downturn, it took six or seven years.”
Opportunities are also hard to come by as there are so few vendors.
Get alerts on Personal Finance when a new story is published