We sell, rent, manage, survey, plan and advise...what can we do for you?
2023 saw a continuation of strong competition for blocks of good farmland and, in particular, for larger complete farms. Unless there is a significant increase in supply of farms to the market, I do not expect this pattern to change in 2024.
The quantity of available farmland rose slightly in 2023 but still remains below historical level. With little pressure from the banks, it remains the instinct of many farmers and of their families to retain land if possible, even if responsibility for the day-to-day farming is given over to a contractor. The family can remain in the farmhouse and can enjoy the amenity of the farm. Diversification projects can be pursued. The taxation advantages of holding farmland have not been eroded. The status quo is appealing to many.
In the meantime, there is a continuous demand for farmland and for farms, both from those within the industry and from without. Landowners who have received a welcome windfall from development sales can quickly find themselves at the end of their 3-year rollover period, at which time sensitivity to the purchase price is dulled. Funds from outside agriculture, particularly for residential properties, is almost limitless.
Accordingly, we have seen that virtually all decent farmland achieved a minimum of around £10,000 per acre last year, but with local competition this price could be pushed to £12,000 per acre, £14,000 per acre or even higher on occasion.
For purchasers with many tens of millions of pounds to spend, of which there is no shortage, a residential farm of 1,000 acres or more is often the target. However, with only a couple of dozen such farms available every year, competition can be fierce.
As I write, the 2024 selling season is just beginning to get underway and we are beginning to see a few farms coming forward. At present, I see no sign that the supply will be much different to last year, and accordingly I would expect to see similar results. Smaller blocks of land will be subject to local competition, which can show a significant variation in prices dependent upon the appetite of the immediate neighbours. Larger blocks will attract interest from across the country, and the expectation is that prices will be in line with the prices which we have seen for the past few years.
At Robinson & Hall, we monitor all farmland sales across the region and larger sales further afield. We are happy to advise on all sales and purchases. Please contact David to discuss further.
No matter who wins the next election, the number of new homes to be built on greenfield sites is set to rocket. The opportunities for landowners in key locations will greatly increase, but there will be winners and losers.
Politicians of all colours have played football with the housing market for years. In one breath they voice support for first-time buyers wanting a home at an affordable price and they criticise the housebuilding industry for failing to increase production. In the next, they vow to protect the countryside from unwelcome development, pretending that new homes can all be built on brownfield sites and allowing local authorities to fail to plan for sufficient new houses.
Both main parties aim for around 300,000 new homes per year, but for decades they have barely provided two thirds that number. Meanwhile, the population continues to grow, and houses remain unaffordable to many. Supply is not matching demand.
What is causing this shortfall? The Competitions and Markets Authority has recently submitted a major housebuilding market study, concluding:
Nothing will change until after the election, but whoever wins, it is likely that our housing shortage will be a growing political problem. Both main parties know that housing is the second basic need for the populace, after putting food on the table. The backlog has now grown too large to be ignored and, one way or another, housebuilding will be increased over coming years, driven by central government. Most of the increase will be on greenfield sites adjoining existing settlements.
Some will mourn the loss of parts of our cherished countryside and that is understandable. However, for some landowners, a windfall from a development scheme can be a much-needed shot in the arm for a farming business or for an expanding family. Many of our farming clients have benefited from modest developments on the edge of a larger village or town and often those developments prove to be well built, while providing valuable contributions to community facilities by way of a Section 106 agreement.
The process of promoting land for future development is very specialised and must be handled with skill and care. There are many pitfalls, including the possibility that land could be compulsorily acquired at agricultural values. The development world is populated by many who will take advantage of the unwary. Nevertheless, there are many professional land agents and land promoters across the country who work together to produce the best possible results for landowners and I would advise anybody with land with potential to take professional advice at an early stage.
There is no doubt that opportunities for the right land must increase considerably in coming years. In terms of housing supply, the next general election cannot come too soon.
If you would like more information or to find out how our Development department can help you, then please contact David or Andrew.
