The value of residential development land fell by half last year as demand plummeted for new-build homes, underscoring losses made across large estates of land amassed by housebuilders during the property boom.

The value of land fell by 15% on average during the last quarter of 2008, taking the market down by 50% for the year. The largest quarterly fall was in London, particularly in the market for land designated for new upmarket homes.

The report, by property consultancy Knight Frank, shows the biggest housebuilders are being forced to sell large land banks to cover operating losses.

Financial Times