1. Residential Market Analysis Marcus Dixon Associate Director Savills Residential Research Dec 2009

2. Back on Track? Nationwide up 7.6% since February Transactions up from 41,000 in February to 82,000 in September Prime central London up 8.4% since Q1 09 Prime SW London up 15.3% since Q1 09 Prime London suburbs up 7.87% since peak

3. Affordability remains high….in theory!

4. the market has divided into the equity haves and the equity have- nots …

5. LTVs affect deposit affordability

6. The adopted mainstream UK forecast 183,855 156,828 162,561 151,877 155,987 164,567 177,732 187,952 197,917 11,867 (27,027) 5,733 (10,684) 4,110 8,579 13,165 10,220 9,966 Av Price Change Source: Savills (forecast of Nationwide quarterly index)

8. Regionally Equity rich areas to lead the recovery

9. Land & Development

10. long term, housing remains a rare commodity

11. activity has bounced back (in some markets)

12. and so we are seeing land markets level trading on smaller less risky sites in higher value markets

13. … but many large sites will remain under water Source: Savills Research

14. BUT….Small sites cannot meet targets need to bring forward large sites too

15. Medium-term land development play 454% Long-term placemaking & land stewardship 974% Long-term placemaking & plot sales 713% the value uplifts from a new land development model should be compelling

16. but this would mean moving away from the linear model of development … Land ownership Finance Design, planning Construction, marketing Property Ownership (Investor and occupier)

17. Land ownership/ acquisition Finance Masterplanning/ Planning Design/ Engineering Phasing/ Construction/ Marketing Management Property Ownership to one that deals with the barriers that are many and complex

18. Land acquisition/ ownership Finance Masterplanning/ Planning Design/ Engineering Phasing/ Construction/ Marketing Management Property Ownership new, long-term models are needed A new vehicle & mechanisms for participation in value uplift are needed