Let’s start with the good news…market conditions do not appear to be getting any worse.

On the new homes sales front, developers are reporting steady sales of on average 2-3 plots per month per site; achieved with aggressive pricing and the use of other incentives including part exchange. Down valuations by the mortgage surveyors however remain a big obstacle once a sale has been agreed.

Estate Agents are similarly reporting better times and at the middle upper end of the market there is a lack of quality housing for sale which is starting to create competition for property in the best regional towns such as Cheltenham and Marlborough.

Having survived the past difficult 18 months and having collected cash from selling off stock plots (often to housing associations and private investors); a number of the volume house builders are looking for replacement sites. This search coincides with most national builders renegotiating their bank funding for the next 3 years.

Does this mean that land deals are beginning to flow…well frankly no or at least not in any volume. But land is being appraised and offers are being tentatively made for the first time in 2009.

Only the investor/cash rich have “serious” money to offer for an outright purchase and of course most in this sector are looking to pounce on needy sellers. We wait to see if the Banks will offer more distressed development sites in the second half of 2009 – this market has been noticeably quiet to date as the Banks get their own housekeeping in order.

Most land offers are structured deals with land value to be phased over many years: often with the developer looking to build under licence with payment to the landowner on house sales. Such deals appeal to the landowners who will benefit if the value of new homes increases during the life of the development.

Hunter Page Estates is currently offering land at Cullompton with outline planning permission for up to 350 dwellings on this basis. The major builders active in Devon are keen to tie up a phased acquisition of this green field opportunity for conventional two storey 2, 3 and small 4 bedroom houses.

In summary…cautious optimism with a large eye on what the Banks are going to do next: more lending please to both home buyers and land buyers.

Robert Dalton-Morris is Director at Hunter Page Estates – committed to advising and trading in development land throughout the difficult market. Robert can be contacted on 01242 220400 or robert@hpestes.com