Land Prices
Posted: March 25th, 2023, 6:07 am
I wasn't sure of the best board to post this on so I thought I'd try this one.
I recently bought a very few Inland PLC ZDP's after the wheels comprehensively fell off at the parent company Inland PLC. It's a high risk, high reward punt.
Inland PLC themselves buy land and then try to obtain planning permission on it before selling it on and in more recent years have built on it themselves.
They have a fairly substantial land bank in various stages of the planning process.
At the moment the parent company has more than sufficient net assets to redeem the ZDP's in full next year.
The question I would like to know the answer to is this. Are land prices the most elastic cost in the housebuilding triangle? What I mean is, if property prices are falling due to the cost of living squeeze and rising mortgage rates and build costs are rising due to wage and materials inflation, is paying substantially less for consented land the only way a housebuilder can continue in operation and still make a profit?
I ask because I am concerned that the NAV of Inland may disappear and I may not get my money back in that eventuality.
I recently bought a very few Inland PLC ZDP's after the wheels comprehensively fell off at the parent company Inland PLC. It's a high risk, high reward punt.
Inland PLC themselves buy land and then try to obtain planning permission on it before selling it on and in more recent years have built on it themselves.
They have a fairly substantial land bank in various stages of the planning process.
At the moment the parent company has more than sufficient net assets to redeem the ZDP's in full next year.
The question I would like to know the answer to is this. Are land prices the most elastic cost in the housebuilding triangle? What I mean is, if property prices are falling due to the cost of living squeeze and rising mortgage rates and build costs are rising due to wage and materials inflation, is paying substantially less for consented land the only way a housebuilder can continue in operation and still make a profit?
I ask because I am concerned that the NAV of Inland may disappear and I may not get my money back in that eventuality.