As we started the year, the consensus was that it was going to be one of the busiest, with positive sentiment in the market following political uncertainty. Little did we know then that the market would be ‘paused’ for some time. Things are however now back up and running and it seems that the demand we saw at the start of the year is very much still there. We have seen interest from both new buyers and established investors, the view being that adverse effects upon the land market from economic uncertainty are limited, with therefore the agricultural market as a whole being seen as ‘safe’.
Nationally there have, so far this year, been fewer farms coming to the market. For Armistead Barnett we are pleased to say that we had a very positive start in our Agricultural Agency department, with over 1600 acres being offered for sale so far this year, with 70% of those instructions already being sold or under offer. Limited supply, together with pent-up demand, led to a good level of activity, and the market moved more quickly than we saw in the first half of last year. Within the North West, average values remain similar year on year, with land values ranging from £6,500 per acre for upland to upwards of £10,000 per acre for arable land. There is however a growing differential between the highest and lowest values.
As the year goes on, ‘rollover’ demand is expected to remain high, as residential development plays a key part of the government’s plan to build the economy out of recession. The rural market is also likely to benefit from increases in numbers of lifestyle buyers seeking the country life, coupled with those with keen forestry and environmental interests, for enhancing natural capital.
The sector is set for significant change, and with subsidy reform on the horizon, logic suggests that we will see more land coming to the market. It is anticipated that farm profitability may be impacted with the introduction of a new Agriculture Bill, and post-Brexit trade deals still to be agreed. Capital taxation changes have not been ruled out, which could impact land buying or selling positions for many. Time will tell. Our recommendation, now more than ever, would be to take early advice on any sale or purchasing decisions.