2019 was characterised by uncertainty - Brexit stalemate prevented many farmers making decisions around business growth, while Common Agricultural Policy reforms remain a source of trepidation.
Continued political discord throughout the year muddied the water further, resulting in important decisions, such as the sale of land and farming businesses, being put on ice.
The Strutt and Parker Farmland Database revealed land for sale fell to a 10-year low during 2019, while Savills reported the lowest number of open market farmland launches in Britain since its records began in 1995.
Strutt and Parker’s data showed that supply of farmland is particularly low in the East of England, East Midlands and the North West.
Across the whole of 2019, supply was down more than 40 per cent against 2018 levels, yet demand for sale remained robust, with overseas buyers also becoming more active in the UK market, buoyed by the weakness in sterling.
With plans put on hold for much of the last twelve months, 2020 is expected to see a glut of farmland entering the market at the same time.
While location remains the highest driver of values and demand, there are several factors that will make land more desirable to potential purchasers.
Farmers should plan-ahead to ensure that farmland listed for sale in 2020 is snapped up at the highest potential value.
Smart sale strategies
Many farmers may wish to sell the land to a fellow farmer, particularly if they intend to continue living in a nearby home.
However, don’t be afraid to consider other possibilities. The UK housing crisis continues to deepen and land is desperately needed for the building of new homes.
If your land is located on the periphery of a town or existing dwellings, it may well be suitable for residential development.
With planning permission already secured, even outline permission, the site will secure a much higher value.
Contact your local council
For those who wish to take the opportunity to sell their land as a residential site, a strategic approach is essential.
The likelihood of securing planning permission will be far greater if a strategic approach is taken from an early stage.
Working with a land promoter or property agent, it’s wise to get the site in front of the relevant people within the local council.
The council is obligated to provide adequate land to meet established housing need, and your land may well be suitable.
The goal should be the adoption of the site into the appropriate Local Plan.
Consider unmet need
Don’t make any assumptions when it comes to smaller plots - while a major housebuilder is unlikely to be interested in a small parcel of land, consider unmet need in the area.
Could it be suitable for other uses, like a care home; another sector which is hugely under-served and for which development land is in high demand.
Self-build is also an option for smaller plots - there are several sites on which farmers can list their land, such as MyPlot, for example.
Land that is too large for a single plot can be split into smaller, individual ones. To facilitate development, utilities close to the site will be essential, plus road access.
Make your network your first port of call
Farmers who list their land for sale without first speaking to colleagues and connections within their network are missing a trick, particularly where land is purely suitable for agricultural use.
Finding a buyer off-market is always a possibility and would prevent the need for expensive marketing fees and time and money spent readying land for sale. However, always take expert advice before agreeing a sale.
Paul Smith, Managing Director of The Strategic Land Group