![Majority of housebuilders offering non-cash incentives to buyers construction 3](https://barcadiapublications.fra1.cdn.digitaloceanspaces.com/property-reporter/img/article/8178-shutterstock_96855058.jpg?v=cc7fb8e538996ac63e21daa556f41979)
"Mortgage availability and cost and buyer sentiment have risen up the agenda over the past year as key concerns in our survey"
- Anna Ward - Knight Frank
The Residential Development Land team of global property consultancy Knight Frank has launched its Q3 2023 Land Index & Housebuilder Survey, which reveals the market views from 54 volume and SME housebuilders.
According to the survey data, in total, 59% of respondents said they were offering items such as carpets or white goods, with over 40% making contributions to legal fees or stamp duty and nearly a quarter offering deposit contributions. A further 16% said they were either offering cashback or mortgage subsidies.
The biggest challenges for the sector in Q3 included planning delays (80% of respondents), followed by concerns about land availability, as well as mortgage availability and cost (both at 47%). Buyer sentiment and the outlook for the UK economy were also identified as key concerns by 36% of respondents.
Charlie Hart, Partner at Knight Frank, said: “It’s interesting to see a significant increase in the number of housebuilders offering various incentives to attract buyers. This only emphasises the need for the industry to adapt and remain agile as the market evolves.
“It’s clear to see that they are doing all they can to generate sales, and throughout these challenging times, it’s now more important than ever to have a government that understands the genuine challenges facing the market. The industry is looking for positive policy direction in the autumn statement.”
The survey by Knight Frank also reveals a split as to the future direction of land prices in England. Overall, 48% of housebuilders said they expect average land values will fall in the final quarter of the year compared to Q3, with another 48% predicting they will stay flat in Knight Frank’s latest survey of 54 volume and SME housebuilders. Just 5% predicted an increase.
England greenfield and urban brownfield index values fell on average by 2.4% and 2% respectively in Q3 2023 compared to Q2, according to Knight Frank’s Q3 Residential Development Land Index. In prime central London, land prices were flat this quarter.
Average urban brownfield land values across England have now fallen by 20% since the most recent peak in the first quarter of 2022 up to Q3 this year, with greenfield values down 17% during this period and PCL easing 5%.
Average values across the urban brownfield sites we track in London have also fallen by 20% during this timeframe.
Anna Ward, Associate in the Residential Research team at Knight Frank concluded: “Mortgage availability and cost and buyer sentiment have risen up the agenda over the past year as key concerns in our survey. Several other headwinds are also limiting development from planning delays to high build costs.
"Looking ahead, the direction of the UK economy is likely to have the biggest impact on the housebuilding sector over the next few months.”