Montagu Evans has published the results of its 2026 residential land survey, which provides a snapshot of opinions on the housing market from developers and investors in London and the South East.
The survey of 53 senior participants was held in January, and found that buyer demand and a lack of buyer confidence were the biggest barriers to development. Last year, the survey highlighted the impact of the Building Safety Act as the primary concern for participants.
The survey also demonstrated a shift towards the building of medium-rise (below 18m) developments, with 72% of respondents preferring this building type.
Montagu Evans says that this isn’t just a building safety act issue. It may be that domestic buyers, who the market is increasingly reliant on, prefer flats in blocks of six to eight storeys rather than towers. Developers are also avoiding locking up too much capital in large projects and prefer shorter-term flexibility.
The survey found that the greatest movement, however, is towards low-rise family housing. This was the least popular choice in 2025 (still high at 55%) but is now the second most selected at 68%. London specialists are less likely to choose this option (45%), however.
Montagu Evans’ data reflected a slight move away from Build-to-Rent, as well as a slight increase in ‘conventional for-sale housing’, however most notable is the decline in the intention to build Purpose Built Student Accommodation, with 30% of respondents saying they intend to build this housing type, down from 45% the previous year.
In terms of land acquisition, the survey found that the market has shifted towards ‘options’ as the first choice for accessing land, which Montagu Evans says isn’t surprising given the current economic and planning uncertainties. ‘Subject to planning’ land acquisition still remains the most popular overall, but has declined as a first choice compared to the previous year, while the popularity of unconsented land has shown the steepest fall.
Montagu Evans says that these all indicate a desire to preserve cash and keep sites moving, while the rise of ‘options’ in particular, reflects both attitudes to risk and perhaps a growing focus on the green/grey belt.
Just over half of respondents reported that land prices have slightly decreased, which Montagu Evans says reflects greater realism among landowners.
Richard Thomas, partner at Montagu Evans, said: “Subject to Planning transactions and Options are the clear land acquisition frontrunners in the current climate. Developer discussions also indicate a need to preserve capital and a greater focus on sites in lower-density areas such as the grey belt. This marries strongly with the typologies in focus for delivery: mid- to low- rise development and where possible houses rather than apartments.”
“This doesn’t mean no demand for planning permissions, it simply means they are led by need rather than strategy.”
“The shift towards private sale housing is interesting given the clear concerns about lack of buyer confidence. It likely reflects uncertainty of pricing across a number of other residential subsectors and effectively a flight back towards most established and familiar forms. Recent London emergency measures are most geared towards success in the sales sector and may impact this further.”
Jon Neale, head of research & insight, said: “The market is shifting towards medium-rise blocks in cities alongside a greater preference for family housing. Planning authorities will have to build this into their strategies, while noting that in London, at least, adjustments to expectations around CIL and affordable housing may be required for viability.”
“Respondents acknowledged that conditions were ‘improving, but cautiously’, citing equity from institutions moving into the BtR market, and arguments that ‘the long game has considerable upside potential.’ Many saw renewed optimism in the re-entry of institutional capital into the market. Some even closed major deals over the past few months, providing an ‘escape route’ and enabling them to raise capital for new products. These could be delivered to supply-starved markets in 2027 and 2028.”
“However, there were still major concerns around government attitudes and policies and calls to reintroduce ‘demand stimulus’ to address the shortage of capable buyers, from a stamp duty holiday to the revival of Help to Buy.”
