The UK residential development land market is stabilising after two years of volatility with a renewed interest in strategic land due to planning reforms. Greenfield land values are broadly flat with brownfield sites facing viability pressures albeit changes to planning policy are starting to unlock some supply, nevertheless the impact will be gradual. The reintroduction of mandatory housing targets, and the publication of a new Standard Method for calculating local housing need, coupled with the announcement of the new ‘Grey Belt’ policy, has widened the scope of land suitable for development.

This demand is expected to continue into 2026 and beyond, particularly in those local planning authority areas which either don’t have an up-to-date local plan or are unable to demonstrate a defensible 5 year housing land supply position. Speculative planning applications are on the rise, as are appeals and the likelihood for success.

The overall market sentiment is cautiously optimistic with developers continuing to be selective with site acquisition but improving economic conditions and interest rate cuts are expected to boost activity.

The effect of the recent NPPF reforms are yet to work their way through the system in full but they are encouraging developers and land promoters to bring forward more sites. The uptick in positive planning appeals has likely been influenced by these reforms and indicates a more favourable environment for well-prepared and focussed applications. Although planning delays remain a key challenge, the role of professional advice in selecting the correct development partner has never been more crucial.

Rising build costs, finance and continued delays to the discharge of planning conditions pre-commencement and during construction continue to frustrate developers, affecting confidence when acquiring new sites. Market sentiment remains fragile amongst second-hand home buyers, with many seeking price reductions, further undermining market confidence, although this practice is regional, and scarcity in certain locations is attracting buyers at the advertised price. Falling interest rates and relaxation on affordability criteria is yet to be reflected in a step change in new home purchasers. Fiscal incentives such as the Help to Buy scheme would be a welcomed by the industry but is highly unlikely given the financial challenges facing the Exchequer.

The Government’s announcement in June 2025, following the Spending Review, of the new Social and Affordable Homes Programme with an extra £39bn is a welcome injection of capital over the next 10 years into the sector. However, there is yet to be a meaningful change in the number of bids for s.106 accommodation, as housing associations and registered providers continue to focus on bringing their existing stock up to the government’s Decent Homes Standards, thus taking away valuable time and resource from appraising new developments.

The market is polarised where demand for strategic land opportunities remains strong and competitive bids are being received, against a backdrop of cautious land buying by housebuilders and SME developers who are nervous about sales risk and planning delays. The weight of capital from institutional and overseas investors waiting to be deployed is still present and would seem likely to remain so for a considerable time but this is highly selective and set against a new set of investment criteria still being navigated and understood by the housebuilding community.

Why Work With Us

Expert Market Insight: We track land values, policy changes, sales data and developer sentiment in real time.
Site Identification Service: Targeted positive approach to identifying opportunities and motivated landowners for clients.
Planning Expertise: Ability to navigate complex planning processes and unlock site potential.
Negotiation Power: Experienced agency and consultancy teams able to maximise value and minimise risk through our proven approach.

Now is the time to position for growth. Contact our Land & Development team today to discuss opportunities and a strategy to secure your next land acquisition.

Charles McLean

Head of Land & Development

07795 297902

ccmclean@lsh.co.uk

James Bromhead

Strategic Land Director

07584 258158

jbromhead@lsh.co.uk

Stephen Hemming

National Head of Planning Consultancy

07778 004283

shemming@lsh.co.uk