Buying and selling land for development is fast becoming a growth industry again.

Mark Linington, director of RPC Land and New Homes takes a look at the market.

After witnessing the worst global recession since the 1930s and many potential land sellers and developers mothballing sites, or opting for the wait and see approach, we have recently seen an upturn in demand for development land, giving a more positive outlook to the market.

When the credit crisis began, the country came to a stop, but people have adjusted to this new environment. Generally, within the South East the public is less pessimistic about the future of the economy and people are feeling more secure in their jobs.

House prices have stabilised and numbers of properties on the market are increasing as a result of boosted confidence and improved buyer sentiment for the housing industry. Positive sentiment is important to help change the perspective of people who are still feeling less confident in the market.

There may be further dips but nothing like the dramatic slump of 2008 to 2009. In fact, economic forecasters expect house prices to grow tentatively over the coming years.

However, when it comes to developing land, to see a successful return the land needs to be in the best places, the product needs to be right and at the right price.

We have seen a considerable increase in demand for development land from larger housebuilders who now have cash resources to buy land and a reduced number of smaller housebuilders with cash or existing finance.

The smaller developers who would normally be looking for several opportunities are finding it more difficult, due to the severe reduction in banks lending, thus creating a shortage in the new homes market.

There is definitely a lot more movement in the market and demand has outstripped supply for quality sites. When it comes to development schemes and obtaining the best return, flats are still seen as a negative, and developers are ideally looking to build two-storey housing schemes.

The last couple of years have been quite a challenge, but with a more positive outlook in the housing industry, I feel that developers offering high quality homes in good locations will continue to sell and build up their portfolios.

RPC Land and New Homes are looking for more land opportunities in sought after places. For more information contact Mark Linington on 01622 691911.