Greenfield and urban land values see decline in Q2 – Savills
Urban land values fell by -2.1% in the quarter, with UK annual falls reaching -6.6%.
Greenfield values dropped by -1.2% in Q2 2026, marking annual falls of -3.3%, according to data from Savills.
The South East saw the sharpest drop at -2.2%, while the North and Scotland recorded small growth at +0.3%.
Urban land values fell by -2.1% in the quarter, with UK annual falls reaching -6.6%.
Analysis stated that developers focused on risk management, with deferred payment terms and conditional contracts used more often to offset planning and development risks.
Demand stayed strongest for 75 to 200 unit schemes.
Appetite for larger sites dropped across the country, with developers looking to reduce exposure to infrastructure requirements that add length and complexity.
Viability remains a challenge for housebuilders, especially in the least affordable markets.
The cost of building a new home has risen by £76,000 in the past five years, driven by material and labour cost inflation and new regulatory costs, according to the Home Builders Federation.
The Savills land agent sentiment survey dropped from +26 in Q1 to -18 in Q2.
Emily Williams, director in Savills Research, said: “At the start of the year, there were hopes that interest rate cuts would help ease the cost of debt and support buyer demand.
“With sales rates still under pressure, build costs remaining elevated and wider economic uncertainty weighing on confidence, developers are becoming increasingly selective about the sites they pursue.”
Patrick Eve, head of regional development at Savills, said: “Developers are adapting to a more challenging market by focusing on risk management.
“Deferred payment terms, conditional contracts and joint ventures are becoming more common, while appetite remains strongest for sites that offer a clearer route to delivery.
“There are some positive signs ahead, with lower oil prices improving the outlook for inflation and potentially supporting an easing in the cost of debt later in the year, which would help mortgage affordability, development finance and appetite for land.”
Eve added: “However, UK economic and political stability will also be key to rebuilding confidence across the market.”
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