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General Election 2017: Hung parliament could be positive for farmland values

But Jeremy Corbyn’s ‘much better than expected performance’ could make buyers nervous’.


Alex   Black

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Alex   Black
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General Election 2017: Hung parliament could be positive for farmland values

The election result could be positive for the farmland market, if it increases the influence of those calling for a softer Brexit, according to Andrew Shirley, head of rural research at Knight Frank.

 

‘Agriculture was one of the sectors of the UK economy that had, in the short-term at least, the most to lose from a hard Brexit,” Mr Shirley said.


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“Last night’s election result seems to suggest that the power of those calling for a softer Brexit, with the UK, for example, potentially remaining part of the single market, will have increased.”

 

Northern Ireland

 

He said the Conservative’s reliance on Northern Ireland’s DUP for a parliamentary majority, could have an impact on negotiations as Irish farmers were particularly vulnerable to a bad trade deal.

 

“This would certainly reduce the potential impact of Brexit on UK farmers given that the EU is our major trading partner for agricultural commodities.

 

“Sterling also weakened slightly following the election result, which makes UK agricultural exports more competitive on EU and world markets.”

 

Scotland

 

In Scotland, the SNP’s weakened position suggested a second independence referendum was ‘much less likely’ which could offer confidence to potential investors in Scottish agriculture.

 

Ran Morgan, Knight Frank’s Head of Farms and Estates in Scotland, suggested the result meant farmland values could firm by as much as 10 per cent.

 

Galbraith, Scottish property and rural consultancy, said the residential property market is resilient and can look forward with confidence.

 

Simon Brown, partner and head of residential sales, said: “We have real confidence that the Scottish property market will continue to do relatively well.

 

“Scotland has faced six national votes within three years but the property market has remained robust with land and property continuing to offer excellent value for money compared with other parts of the UK,” he said.

 

“The continuing low value of sterling may well be attractive to foreign investors and this may benefit the country estate market and the farm market.

 

“In general the prime property market in Scotland remains an affordable and attractive option despite the effect of the introduction of the Land and Buildings Transaction Tax and we believe this will continue.”

 

Mr Shirley added Brexit had not really affected the farmland market and the fall in values was largely down to low commodity prices, which had been boosted by the weaker pound.

 

Labour

 

“However, Jeremy Corbyn’s much-better-than-expected performance and the uncertainty of a hung parliament could make some potential buyers nervous,” he added.

 

“It was widely reported in the press, although denied by Labour, that the party was planning to introduce an annual tax on property, including farmland.”

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