Housebuilding land value drops 20% in first half of 2008

The value of residential building land dropped 20% in the first six months of the year and could still fall by up to 50%.

Research by Savills shows the value of brownfield sites fell by 19.8% and greenfield sites by 22.5% - four times the rate that house prices have dropped over the same period.

Savills’ director of research Yolande Barnes told the Daily Telegraph: “There are two ways that falling land values affect housebuilders.

“The first is in pushing down share prices, but the more worrying issue is for those that are heavily indebted and are under pressure from their banks to repay debt.

“At the moment you have to sell development land at fire-sale prices.”

She said there were still people looking to invest in cut price bargains though.