There is a growing shortfall of development land to meet the country’s housing needs with planning consents for developments at half the levels of five years ago.

According to Savills’ Development Land Index, England will be short of 1.1 million homes by 2016 if more sites do not become available for building.

The shortage of developable land is due to low levels of planning consents which are at little more than half the levels seen in 2006 and 2007.

Across the UK, the Savills index shows that greenfield building land values increased by 2.1 per cent and urban land values by 2.2 per cent in the first three months of 2011, bringing annual growth to 7.7 per cent and 6.7 per cent respectively.

“We have begun to see a few large, well-capitalised players investing in strategic land with the aim of delivering serviced plots in good locations,” said Simon Horan, residential development director at Savills in Birmingham. But such activity is not enough in relation to market demand. It is good news that the Government clearly recognises the contribution that house building can make to economic recovery and coalition policy seems intent on achieving higher levels of house building through the planning system.