BM Rural Outlook - Flipbook - Page 39
36 | Rural Outlook Issue 21
Sales & Lettings | 37
“Buy land, they aren’t
making it any more”
There may be plenty of uncertainty around farming
at the moment, but one thing that shows no sign
of changing is the continuing rise in the value of
agricultural land.
While there are inevitably short-term
fluctuations in the price of land in
response to political events, policy
changes and other external factors,
any longer-term look at land values over
the years shows the price of farmland
rising steadily, with the south east leading
the way.
Part of the reason, of course, is that
the amount of land available inevitably
declines over the years. Mark Twain is
said to have observed: “Buy land, they
aren’t making it anymore”, and much of
what they did make has since been sold
off to help meet this crowded country’s
desire for new homes.
While the amount of land available for
growing crops is diminishing, the quantity
of mouths the land needs to support is
increasing as the population rises, and
that provides opportunities for efficient,
highly productive farmers who can
deliver the goods. Economies of scale
lead to larger commercial holdings, which
requires a greater investment in more
land and a consequent rise in demand.
Although political upheaval can
sometimes dampen prices, change can
also prompt canny investors to bank on
new opportunities. While the phasing out
of Basic Payments and the introduction
of the Environmental Land Management
scheme (ELMS) may be worrying some,
that same scenario has suggested to
others that the future is bright.
Farmers who can see an opportunity
to benefit from producing ‘public good’
by planting new woodland, helping to
prevent flooding or sequestering carbon
in meadows are looking for more land
even while others think carefully about
opting for the forthcoming exit scheme.
“The demand for land has never been
stronger, and I have of course seen
prices go up and down. Over the past 12
months the increase has been marked
and I cannot see this changing.”
Prices are strong for investment land and
equally firm for land that is being actively
farmed, as farmers use rollover funds
or other sources of cash to expand their
holdings and increase their efficiency.
“The demand for land has
never been stronger, and I
have of course seen prices
go up and down. Over the
past 12 months the increase
has been marked and I
cannot see this changing.”
Land has continued to defy recessions
and setbacks down the years, and
although the coronavirus hit the general
economy hard, it had far less effect on
farming, which carried on regardless.
In doing so, the sector played a vital
role in feeding the nation while at the
same time boosting awareness of the
industry and the benefits of shopping
locally. The sector did, however, suffer and continues to suffer - from a lack of
harvest labour.
With that particular crisis now hopefully
receding, the ELMS framework slowly
becoming clearer and Brexit now a reality
to be dealt with rather than an unknown
to worry about, the price of land is still
increasing, seemingly unfazed by such
macro-economic issues.
While all land is commanding strong
prices, the best quality land is doing
even better. “The gap between the best
and poorest land has widened, but that’s
because quality land is at a premium, not
because lower quality land is worth less,”
said Russell.
Even ploughable pasture is fetching
£10,000 an acre for a 50-acre parcel in
some cases, well ahead of the £7,500
acre that would have seemed respectable
not long ago. This is before any additional
premium for development potential and
amenity qualities is added.
Russell Parkes
r.parkes@batchellermonkhouse.com
Matthew Braxton
m.braxton@batchellermonkhouse.com
And it’s not only farmers who are seeking
to buy additional land to take advantage
of new opportunities. Investors
looking ahead to the introduction of
carbon trading schemes and other
environmental initiatives are helping to
increase demand for land and continuing
its upward momentum.
Batcheller Monkhouse’s Russell Parkes,
a partner with the estate agency side
of the business (based in Pulborough),
commented: “Having qualified as a
chartered surveyor nearly 35 years ago,
I have helped with the sale and purchase
of thousands of acres across Sussex and
adjoining counties over the years.
Case Studies
The sale of Chapel Farm at
Oakhanger in Hampshire presented
a rare investment opportunity with
development or change of use
possibilities.
Presently used for livestock, with
a comprehensive range of farm
buildings and some 169 acres of land,
together with a disused brickworks
at one end of the farm, it attracted
multiple offers based on a guide of
£2.6 million.
Other sales completed recently
have included:
• A gloriously located arable farm
that achieved the asking price of
£3.72 million and comprised a
recently refurbished farmhouse,
12,000 sq. ft of agricultural
buildings and 290 acres of Grade
2 land adjoining the River Rother.
• A former golf course, substantial
club house with consent for
holiday letting and some 88 acres
in a glorious setting, which sold
‘off market’.
• A historic country estate with some
300 acres of mixed agricultural
land, farm cottages, stable block
with granary holiday let, workshop,
superb Sussex barn and about
10,000 sq. ft of farm buildings sold
for more than £3 million.
The drivers for the increasing value
of land appear to be the consensus
that land is a safe-haven for rollover
funds and a reliable investment for
the future, with the chance to take
advantage of new opportunities
outweighing any uncertainties
caused by the end of BPS and the
post-Brexit landscape.
For advice on the sale and purchase
of farms and land please contact
Russell Parkes on 01798 872081 or
Matthew Braxton on 01424 775577.
The gap between the best and poorest land has widened because quality land is at a premium