By Developers are focusing their efforts on purchasing farms, as over half of farm land plots available in the current market have already been sold and put under offer – the highest demand levels seen across all land types.
That’s according to the latest Land Development Demand Index from Searchland, the development site sourcing specialists.
The research monitors appetites for land plots across England based on the number of available opportunities within the market that have already been snapped up by developers.
The latest index for Q3 shows that 42.7% of total land development opportunities listed in the current market have already been snapped up by developers.
The most in demand land development type in Q3 is farm plots, with 55.3% sold subject to contract or under offer, with interest surging by a substantial 12.4% between the second and third quarters.
Farms can be attractive to developers as they’re less polluted than other land types, while there’s less of a need to demolish buildings if you want to convert the land and in recent times, they have become a popular choice for large logistics warehouses, such as Amazon distribution warehouses.
Other investment opportunities
Land only developments also remain popular, with demand at 43.7%, giving investors a clean slate to build what they want.
After that comes industrial developments, as 37.4% have been purchased, followed by commercial developments, at 36.1%.
The least popular area for investors is residential developments, at 33.8%, which are generally considered safer but can be less lucrative investments.
Commercial demand falls
Overall demand for development opportunities has fallen by 1.8% between the second and third quarters to stand at 42.7%.
This reduction is driven by falling interest in land only plots, falling by -2.3% quarter-on-quarter.
Meanwhile there was a -1.5% drop in residential development demand, and a -0.3% reduction for industrial development.
Commercial developments bucked the trend, where demand rose by 1.1% to reach 37.4% in the third quarter.
Regional look
While farms are broadly the most popular land type, this is only the case in around half of regions.
These are the South West, with demand at 65.0%; the North West, at 66.7%; the North East, at 52.4%; the East of England, at 52.6%; and the East Midlands, at 45.5%.
Industrial developments meanwhile lead the way in the East Midlands, at 61.5%; London, at 38.5%; and Yorkshire and the Humber, at 100%, reflecting how those regions are awash with a plentiful supply of brownfield land ready to be developed.
Co-founder and CEO of Searchland, Mitchell Fasanya, commented:
“Farmyard developments are all the rage, and this high demand is being driven by the ability to convert these land plots into large logistical sites such as Amazon warehouses.
However, growing interest in farms is something of an outlier, as broadly speaking investor demand has cooled since the summer.
Some are likely put off by difficult market conditions, where high interest rates make it harder to turn a profit when securing finance.
With demand being more balanced, at least it gives savvy developers more opportunities to haggle on price, potentially making a greater return in the process.”
| Table shows current market demand for land plots by plot type and by region, Q3 2023 | ||||||
| Locations | All Development Types | Land only | Commercial Development | Industrial Development | Residential Development | Farm |
| East Midlands | 37.6% | 37.8% | 38.5% | 61.5% | 31.4% | 45.5% |
| East of England | 48.9% | 49.6% | 38.2% | 30.0% | 45.2% | 52.6% |
| London | 33.5% | 35.0% | 35.3% | 38.5% | 27.4% | 0.0% |
| North East | 32.6% | 32.6% | 23.5% | 0.0% | 19.0% | 52.4% |
| North West | 39.9% | 41.2% | 34.5% | 26.7% | 31.2% | 66.7% |
| South East | 43.2% | 44.2% | 42.1% | 38.1% | 27.8% | 33.3% |
| South West | 42.3% | 42.8% | 34.8% | 33.3% | 36.8% | 65.0% |
| West Midlands region | 48.0% | 49.6% | 37.1% | 42.9% | 37.1% | 40.0% |
| Yorkshire and the Humber | 48.8% | 49.0% | 34.6% | 100.0% | 47.9% | 72.7% |
| England | 42.7% | 43.7% | 36.1% | 37.4% | 33.8% | 55.3% |
| Table shows quarterly change in demand for land plots by plot type and by region, Q2 2023 versus Q3 2023 | ||||||
| Locations | Land / Development – All Types | Land only | Commercial Development | Industrial Development | Residential Development | Farm |
| East Midlands | -0.3% | -0.5% | 9.4% | 21.5% | -6.2% | -4.5% |
| East of England | -3.6% | -3.5% | -10.8% | 7.8% | 0.8% | -14.0% |
| London | 0.1% | -3.8% | 8.5% | -1.5% | 7.1% | 0.0% |
| North East | 0.6% | -2.1% | 6.9% | 0.0% | 4.8% | 29.3% |
| North West | -1.0% | -0.9% | -4.8% | -4.6% | -4.0% | 33.3% |
| South East | -2.7% | -3.3% | 8.2% | -8.6% | -2.6% | 19.0% |
| South West | -3.6% | -3.5% | -5.0% | -33.3% | -2.0% | 6.2% |
| West Midlands region | -1.2% | -1.7% | 2.2% | 0.0% | -1.9% | 11.4% |
| Yorkshire and the Humber | 0.7% | 0.7% | 12.0% | 0.0% | -14.3% | 22.7% |
| England | -1.8% | -2.3% | 1.1% | -0.3% | -1.5% | 12.4% |
- Demand based on the total number of plot types that have already been sold subject to contract. For example, if there are 100 total plots available on the market and 50 have SSTC, demand would sit at 50%.
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