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Farmers holding back from marketing land with major changes on the horizon

Caution has been the main feature of the property market so far this year, with the uncertainties of Brexit weighing on the sector.

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Farmers holding back from marketing land with major changes on the horizon

Sellers are reluctant to bring land forward, with buyers being discerning about their purchases.

 

However, the lack of supply coming forward has helped to keep prices relatively stable as people waited on the future direction of the agricultural industry.

 

But for those who were considering selling, it may be worth putting the land forward now, as there are buyers out there.

 

Alex Lawson, director of national farms and estates at Savills, said it was the third lowest amount of supply for the first six months of the year in about 20 years.

 

“It caught up a bit in the last month or so. Until May or June it was the lowest on record,” he said.

 

“It is the general lack of confidence and general uncertainty.”

 

However, there were large variations in prices being achieved between the top quality, in demand land and others.

 

Cautious

 

Michael Fiddes, head of estate and farm agency at Strutt and Parker, said: “Demand is variable. Buyers are becoming generally more cautious.

 

“The average price is holding up well, but there is huge variation.”

 

Non-farming buyers were also playing a more important role in the market, with the percentage of active farmers looking for more land at a low point.


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BREXIT

 

TIMES of uncertainty often meant people ‘sit tight’ and wait for clarity before marketing their land or making a purchase.

 

And with Brexit, people had been holding off waiting for the deadline earlier in the year.

 

But as that deadline has been and passed, property experts expected land supplies would remain
restricted beyond Boris Johnson’s ‘do or die’ deadline to leave the European Union on October 31.

 

“We were meant to be coming out on March 29,” said Charles Dudgeon (pictured), Savills director of Scottish farms and estates.

“Everyone thought ‘we will wait until March 29’, and people have just sat on their hands.”

 

And he expected it would continue until the industry had more certainty.

 

“I think we are going to see a continued drought in acres for the rest of the year and people will make their minds up post-Brexit,” Mr Dudgeon said.

 

He highlighted it had been the same in 1991, as the industry waited on a round of Common Agricultural Policy (CAP) reforms.

 

“There was almost a vacuum of land,” he said.

 

“It took until about 1993 before the markets recovered.”

 

Mr Fiddes said any time there had been a reform of CAP it had reduced the supply of land.

 

“People wait to see what the outcome is, rather than committing,” he said, adding he expected there would not be a large amount of land coming forward in 2019.

 

Commercial

 

The Eastern Counties had felt this lack of supply most acutely, with Mr Lawson highlighting this was down to the market being dominated by commercial arable farming enterprises and fewer lifestyle buyers.

 

“The commercial areas of the countries have probably been more affected by the level of supply,” he said.

 

“In other areas there are a wider range of motivations for buying.”

SELLERS

 

REALISTIC preparation and pricing was vital for those looking to sell in this market, with bidders reassured when buying a property there was competition for.

 

Mr Lawson said: “Having a realistic price or a conservative pricing strategy ought to generate more interest and a better result.

 

“For presentation, it is worth making sure things are looking spic and span.”

 

He added preparation was incredibly important.

 

“So you have identified any issues that need to be disclosed and, if possible, resolved. If you agree a deal with someone and issues pop up, they are likely to renegotiate,” he said.

 

“Get all of those in the open and resolved in advance.”

 

He added some people were seeing an opportunity to sell with limited land coming forward. Mr Dudgeon agreed, saying anyone who wanted to sell in the next year or two should consider going to market now.

 

“You have got a market now, so why not use it.”

 

Mr Fiddes said there were still good buyers around, with quite a lot of rollover buyers in the market.

 

“There are still people who want to buy land. They may be more discerning,” he said.

 

Location was an important factor in selling well.

 

“If you live in the area and want to buy more land, if it is next door to you and a good price you might buy it,” Mr Fiddes added.

 

Market

 

“If they are rollover buyers, they want to look in the right area. But they do not feel they need to jump into the market.”

 

He added selling now depended on where the land was and what it was.

 

“If they have the right property in the right area, there is something to be said for getting it on the market,” he said.

SCOTLAND

SCOTLAND

DESPITE the headlines there was still an active market in Scotland, according to Mr Dudgeon.

 

While land coming forward had been restricted, he said there were still buyers out there.

 

“There are active farming buyers who have probably got successors coming in behind them,” he said.

 

“If they are going to carry on doing the same thing, they have decided they need more acres.”

 

Others were looking for something different to the farm they currently had as they looked to diversify.

 

“We have not seen any farms this year making less than last year. In some cases, quite surprisingly, when it is a near neighbour interested, we are seeing some good prices,” he said.

 

Existing farms looking to expand were searching for suitable land within 10 or 15 miles, but there were some buyers from England, although probably not as many as two years ago when there had been an ‘exceptional’ price gap.

 

He said: “Some people are thinking that, as they cannot get what they want in Oxfordshire, why not sell up there and get what they want elsewhere?”

 

Strong

 

And with the Northern Irish market picking up ‘pretty well’, Mr Dudgeon highlighted some farmers and landowners were beginning to ‘cast their eyes over to Scotland’.

 

He added for dairy farms the market seemed to be telling them the outlook post-Brexit was ‘pretty strong’, but upland farms were seeing competition from the forestry market rather than beef and sheep farming.

CURRENCY

OVERSEAS buyers have shown some interest in the market as the weaker pound makes UK farmland more attractive.

 

Mr Dudgeon said there had been a large amount of interest from overseas in Scotland, particularly for larger estates.

 

“For those with dollars and euros, Britain is going to look very good value,” he said.

 

Mr Lawson added there was definitely interest and they had had discussions with people who felt the weaker pound gave them an advantage.

 

“But one of the issues with the UK market for international buyers is just the limited supply,” he said.

 

“The number of properties and the scale of properties which come forward means the UK is not as attractive as some other markets where you can make much more substantial investments.”

 

Cheaper

 

He highlighted international investors could buy much larger scale assets in other markets. Mr Fiddes added it made land look cheaper, but the uncertainty was affecting potential buyers from overseas too.

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