Property auction home >> Property Auction Articles >> Why invest in land?

Why invest in land?

Land Price Boom Per Hectare

UK Land Prices 'Rocket'
The Price Of Residential Land In The UK Has Increased A Staggering Eight-Fold Over The Last 20 Years
A shortage of residential land combined with buoyant demand for new properties lies behind rising prices says the Halifax survey. Unsurprisingly, the most expensive land in the UK is in London and the South East and the cheapest in Wales and the North. However, of late prices have been rising faster in lagging areas, and the gap closing. Residential land has proved an even better investment during the last 20 years than property - with house prices rising 306% Long term, land supply shortages are likely to continue and as a result house prices continue to grow.

Region By Region
The price of a hectare of London land - equivalent to two and a half acres now stands at nearly £5.5rn. In 1983, a hectare cost just £759,000, meaning land prices in the capital have raised by 624%. Land prices in Wales have grown the fastest. In 1983, a hectare cost just £85,000. By the end of 2002, this had soared to £980,000 •• a 1,053% increase. Across the UK, land prices have risen from £174,000 a hectare to nearly £1.6m - an increase of 808%.

Shortages
The Halifax survey revealed that the number of sites sold for residential development had fallen since 1997, as focus has switched to the redevelopment of brown field inner city sites, However, the Halifax warned that a shortage of sites has also been "a contributing factoi to the strong increase in house price inflation since 1999". In addition, Martin Ellis, Halifax chief economist, cautioned over the levels of red tape faced by developers 'Getting permission to build new homes in the UK Is a notoriously difficult and long winded process."