Land and property markets have been shaken by the Covid-19 epidemic, but how long will it take for things to bounce back? Ewan Pate reports.
Land and property markets have been held back by the Covid-19 crisis but analysts are confident the market will bounce back soon after the lockdown ends.
The Scottish market in farm land traditionally starts to build up a head of steam in May with the peak of activity targeted for Highland Show week in late June.
With the show cancelled and travel restrictions likely to make viewings difficult this will be a very different season, but agents still believe there will be a land market in 2020.
Evelyn Channing, Savills head of rural agency in Scotland, said: “Timings of proposed sales for 2020 will depend very much on whether there will be a relaxation on current restrictions on movement and indeed if the Scottish Government is in support of UK policy.
“If viewings are permitted, observing social distancing protocols, then it is entirely possible that farms and estates will be brought to the market, albeit perhaps two or three weeks later than originally planned.
“Prior to the outbreak of Covid-19 there was optimism in the market, which often accompanies spring.
“Buyers had been ready to commit to the market following the General Election result, and those previously frustrated by the lack of stock to consider had been anticipating new farms and estates coming to the market.
“Unsurprisingly, all that is on hold. However, food security is quite rightly moving up the political agenda
and this, along with the lack of stock and uplift in demand for land for its natural capital potential, is likely to mean the long-term prospects for values are good.”
Ms Channing pointed out that if marketing material is all well prepared, it can take no more than 24 hours to get a property live on the website and other property portals.
With many farms and estates relatively isolated, she thought it would be possible for owners and agents to carry out viewings in separate vehicles in order to socially distance, while holding a commentary via mobile phone.
Virtual tours of dwellings and drone footage of land could be shared with potential buyers.
“The dramatic fall in the stock market may encourage some of those with funds to invest in land and property,” she said.
“Land is viewed as an attractive investment and when life does return to normal we may see an increased focus on Scottish rural property.”
Duncan Barrie, of Galbraiths, believes Scotland’s rural property market will bounce back as soon as the lockdown ends due to significant pent-up demand.
“During lockdown we have managed to run five successful closing dates covering property in Central Scotland, Edinburgh, Angus and the Scottish Borders,” he said.
“In relation to the farm and farmland market, at present the level of interest appears relatively unaffected, with farmland now seen as a potential safe haven when compared to the current turmoil within the stocks, shares and other asset classes.
“We are aware of buyers being keen to take advantage of even lower interest rates in relation to their purchase.
“In recent weeks, four of the UK’s major mortgage lenders have announced more generous terms for borrowers, including an extension in their loan-to-value ratios, reduced mortgage fees or an increase in the maximum loan offered.”
Douglas Orr, farm agent in Strutt and Parker’s Edinburgh office, said: “We currently have a number of
properties being sold privately and properties being prepared for open market launches in the coming weeks and months.
“There appears to be a healthy appetite within the market for moving forwards as soon as it is appropriate.
“A livestock farm in the Borders, launched on a Friday for offers over £1 million. By the Monday, it had several viewings booked and two notes of interest.
“While there has been a reduction in supply for this time of year, anything that has come to the market has been surprisingly well received.
“Deals are progressing. The Inverness office has concluded a private purchase of 1,200 acres of grazing land in the north of Scotland and completed the sales of both a 10-acre hobby equestrian farm in Easter Ross and 50 acres of Grade 3 land near Dornoch.
“Meanwhile, the estate sales team has concluded two off-market estate sales in the last month.”
There is also optimism south of the border.
Stewart Hamilton of Stephensons Rural in York said: “I am optimistic for the coming year in relation to rural property once restrictions are lifted.
“The current lockdown has shown how important outdoor space is, particularly access to the countryside.
“I believe rural properties will be viewed differently and will jump in popularity, almost immediately.
“On the back of this we may well see farms being divided with the traditional farmhouse commanding a greater premium than before.”
Daniel Rees, director, Savills, said in Wales, there was ’pent-up demand’ for buyers eager to see increased stock and choice on the market compared to 2019 when it was limited due to the Brexit uncertainty.
He added virtual viewings via video had been popular with both sellers and buyers during the lockdown and agents had received a number of acceptable offers in advance of physical viewings.