Land developers 'may struggle to make profits'

Wednesday, May 12th 2010

Developers in Britain may be struggling to make enough money from their projects, which is particularly difficult when land is priced highly.

According to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, there are also many other regulatory costs making this a difficult challenge.

His comments follow a report on residential land values from Knight Frank, which was published on May 10th.

It found the strongest growth rate since 2005 occurred in the 12 months up to March 2010, with an 11.5 per cent increase in values.

London was found to have one of the strongest quarterly growths in the country, at an average of 6.8 per cent.

"I think it is indicative of what has been going on in other asset classes and other asset markets," Mr Rubinsohn commented.

As the global economy strengthens, so too do parts of the UK's industries - and land prices could be among this, he added.