Farming talk: Dry weather steadied the busy summer land market
The weather seems to be the bugbear of the land market in 2018.
The cold wet spring added to the Brexit blues at the beginning of the year and now land availability has picked up as we have all sweltered during the heatwave.
There has been a notable increase in farm land coming onto the market in Shropshire and bordering counties in recent weeks which has seen a good of level interest particularly from buyers with diversified money or rollover money to spend.
As the 2018 agricultural property market emerges the polarisation of land prices continues. It is a picture we have seen in Shropshire and the bordering counties for some time now.
Land parcels located in areas where strong businesses want to expand are achieving in some circumstances exponential prices per acre, but in the same breath more marginal land in areas of low demand have required some clients to reduce price expectations.
At Berrys we have been favoured with a number of farms on the market this year due to either retirement or relocation and there has been a positive picture with regard to the level of demand for these properties.
The demand has either come from local farmers wanting to expand their existing holdings, futureproofing for the next generation, or other farmers relocating to the area. In the main money to purchase these farms has either been derived from diversified income on their existing holding or rollover proceeds for purchasers who have sold land for development.
Bare blocks of land are still an essential part of the farmland market with demand mainly derived from local farmers or in some cases amenity purchasers. More consideration is being given to what will happen post exit from the EU and this is causing purchasers to question the viability of their farming business, what their level of borrowing is, and can they service their overdraft or loan?
Prices will be determined by the quality and location of the land and competition from buyers and other land for sale in the area. The large, accommodating blocks of land with good access and excellent productive capacity will attract the most interest whereas poorer land in difficult locations will likely see a shallower market.
Where whole farms are offered on the market, larger well equipped farms still receive a high level of demand but where this is not the case, lotting can be an effective way to encourage a successful outcome.
Private transactions are also prevalent in the rental sector. Land for rent rarely comes to the open market and prospective tenants need to keep their ears close to the ground to seize any opportunities when they arise. The opportunities are definitely out there to rent land but we are unlikely to see them advertised in the local paper.
To sum up, the demand for farmland is likely to continue but prices achieved will depend on the productive capacity, access and location of the property. But a greater consideration may be who is going to be interested in buying the land and how strong is their existing business?
By Charlotte Rogerson, chartered surveyor with Berrys at Shrewsbury.
