9165 - BM Outlook 2022 R6 - Flipbook - Page 36
land and woodland, and are thus less
concerned about the suitability of the land
for arable crops. Low-lying pasture or
woodland with conservation potential is
very much on their radar.
The Woodland Trust is amongst the
potential buyers for land with good
conservation potential, while other buyers
with spare cash may simply want to
enhance the amenity value of a parcel of
land. We are also starting to see demand
from businesses and developers looking for
solutions to the anticipated environmental
and carbon off-setting provisions.
There is also demand from neighbouring
farmers looking to expand, with the need
for increasing efficiency inspiring a move
towards larger holdings amongst those
who have a sustainable business plan
despite the pressures and challenges
facing modern-day farming.
Farmland prices remain high across
the region, fuelled by an acute
shortage of land right across the
South East and by steady demand
from lifestyle buyers, farmers
looking to expand their holdings
and, increasingly, those with
rollover funds to spend as more
land is released for development.
The Inheritance Tax reliefs for those who
pass commercial farmland down to their
offspring also continues to restrict supply,
with families loath to part with such a
valuable benefit.
That reluctance means that despite
the fact that the farming population is
ageing, very little additional land is being
released to the market, with high prices
and strong demand still not enough to
tempt farmers to cash in what could
instead deliver a valuable tax advantage
to future generations.
The Government’s drive to persuade older
farmers to retire and free up land for the
next generation by offering them a cash
incentive to stand down is also not likely to
make much of an impact, as the scheme is
simply not generous enough to encourage
widespread take-up.
One other issue affecting the restricted
supply is also likely to be ongoing
uncertainty, both around the future of
34 | Outlook
farming and the world situation in general.
At times like this land is seen as a safe,
tangible asset and something people tend
to hang on to as a hedge against whatever
the future may hold.
On the demand side, smaller, residential
farms and country houses with 10 acres or
so of land are being snapped up by lifestyle
buyers who are keen to move out of London
or elsewhere within the M25 and are
looking for a good-sized house with land
that offers amenity value and privacy.
In these cases, it is inevitably the house
itself that is the deciding factor, although
it’s not unheard of for the buyer to
develop an interest in a niche area of
farming, such as breeding pedigree cattle.
Other buyers simply let out the land and
enjoy their rural lifestyle.
In the case of more commercial farms,
the main driver is inevitably the quality
and amount of land on offer, with the main
demand coming from buyers with rollover
money from residential or commercial
development on their existing farmland.
With a wallet full of cash that needs to be
reinvested, those buyers are keen to buy
more good quality land.
R ussell Parkes
Partner,
Pulborough
While commercial blocks of land to the
east of the region are currently selling
for £8,000 to £8,500 per acre, land to
the west is fetching between £10,000
and £12,000, pushed upwards by the
particular shortage of land for sale in
West Sussex and the fact that it is more
accessible from London.
Smaller parcels of land, something like
a 10-acre paddock, are fetching £15,000
to £25,000 per acre or more if they are
considered to have long term development
potential. While such sites can be subject
to an overage clause, setting up such an
agreement can be costly and takes time
to draft and should only be considered
where there is realistic chance of the land
winning planning permission.
Looking ahead, the direction of travel is
likely to stay much the same for the near
future, with tight supply leading to prices
staying high and reflecting land’s strong
performance over the past 20 years.
Co-Location Storage
Given the current climate of transitioning into low
carbon energy systems, there are many opportunities
for renewable energy and battery storage in the UK. At
present there is more than 16.16 GW of battery storage
capacity in the UK Energy Storage Market, either in
operation, construction or proposed. The Government
recently introduced £6.7 million of funding for new
energy storage projects across the UK. Battery storage
is able to store solar and wind energy that is surplus to
immediate requirements.
Recently, combining wind, solar and battery energy
source generation in one location has seen an increase
in global demand. Incorporating multiple energy
sources in the same location increases the productivity
of the overall site as well as making use of the existing
infrastructure, which can be shared between the
sources. Other benefits include reduced operating
and development costs and construction timelines of
the sites. While co-location is set to shape the market,
renewable energy and storage are different asset
classes and so combining energy sources with battery
power is a unique proposition as not all investors are
interested in renewables and storage.
At Batcheller Monkhouse we are also
seeing increasing demand from those with
an interest in conservation or charities
looking to make ‘green’ investments in
Sales & Lettings | 35