There were “tentative signs” of a recovery in demand for land in December and January, partly driven by an improvement in delays at the Building Safety Regulator, the broker said

The value of land for new housing in Britain “may have reached a floor”. This comes as easing borrowing costs and planning changes increase developers’ appetite to build, based on a survey of 40 homebuilders by Knight Frank.

The “prevailing view” among developers is that late 2025 marked the bottom of the market, helped by government efforts to improve the planning system and a reduction in regulatory hurdles, based on a report sent to clients.

There were “tentative signs” of a recovery in demand for land in December and January, partly driven by an improvement in delays at the Building Safety Regulator, the broker said.

James Barton, department head of Knight Frank’s London land agency, said: We might be close to the bottom of the cycle.

However, he added that stabilising land values alone would not shift the dial for developers who urgently need demand-side stimulus to get building again.

Since the Labour Party took power in 2024, building activity has declined at the sharpest pace since the depths of the pandemic. Frequent tax changes, along with a rise in planning and regulatory hurdles, have weighed on the pace of development in recent years.

The residential land values were largely flat between October and December, and over half of housebuilders expect prices to either increase or stay the same in the first quarter of 2026, said Knight Frank.

The predictions that the market has bottomed out were partly driven by the latest planning reform announced late last year, which could limit opposition to residential projects, the broker added.

Between October and December, some 57% of housebuilders experienced a decline in site visits and reservations, against the less than 10% that reported an increase, based on the survey.