YRPS Insight: Edition Eight - Flipbook - Page 6
The year of 2020 will undoubtedly be remembered for
the monumental distress and upheaval caused by the
COVID-19 pandemic. Yet, despite the problems that
have been experienced across the world, the land agents
at youngsRPS have continued to be extremely busy. We
have been working hard behind closed doors, and the land
market has remained significantly active.
RURAL MARKET
UPDATE
Tom Oates provides an update
on the Rural Market.
Throughout the year, the enquiries for land have been
continuous, and a significant number of deals have been
completed. Both private, and on-market properties have
received serious and genuine interest. While private deals
will remain private, an example of a public transaction
would be the successful offering of White House Farm,
Wigton, for sale by private treaty, which through sustained
interest, resulting in a closing date, saw an agreed sale in
excess of the asking price.
Land prices within the North have most certainly
maintained values over the past twelve months.
Undoubtedly, one of the principal reasons for maintained
values has been the lack of property coming to the market.
Where indeed properties do become available, this very
constraint produces active interest from both near, and
distant, potential purchasers.
Whilst supply is restricted, this leads us to the thought as
to where the demand is coming from. In turbulent times,
land is seen as a safe and secure investment, so we have
seen a large amount of interest from investors looking
for places to put money in the threat of a prolonged
economic crisis. This, coupled with the low, long term cost
of borrowing, and the ability to fix borrowing for long
periods, has maintained the strong interest. Furthermore,
whilst the arable sector has suffered with the extremes
of weather over the past twelve months, crop returns
- probably with the exception of winter barley - have
been surprisingly good with prices holding up as well.
The red meat sectors have also been enjoying far better
returns, which all helps to inject activity in the property
marketplace.
For the slightly more marginal land, generally speaking
within the arable sector, there is undoubtedly a huge
demand for land with potential for forestry planting.
We have successfully completed transactions for such
purchases, and without a doubt, there is a strong demand
for this sector. This demand, with the recent announcement
of additional funding, is likely to continue, certainly in the
short to medium term.
The result of the above is that for any potential vendors
considering their options for the future, my advice would
be to start the discussion sooner rather than later. At
present the demand is there, the money is available, and
the asset is considered very secure. There is, however,
the clear thought that in order to pay for the cost of the
current pandemic, it may well be that the Chancellor’s
thoughts turn to the agricultural or land sector to help
to bring in some revenue. Any change in the taxation
structure could well have a serious impact on land, and
whilst no one has a crystal ball, this is a comment that
is being tentatively voiced by a number of professionals
throughout the industry. Despite this, it is clear that there
is still a strong demand at present, and most certainly it
is the market pushing the prices, and not just the land
agents!
Tom Oates | tom.oates@youngsrps.com