Land — an increasingly valuable commodity

The agricultural sector within the UK is currently experiencing some significant changes, brought about in part by the increasing globalisation of the food market, and also by the need to re-adjust to a new and complex support structure which is driven by a completely different set of requirements to those which the industry has grown used to in recent years, writes Andy Dyer, of H&H Bowe.

H&H Bowe’s Andy Dyer says market forces are driving more than the price of the end product with farms such as Dryevers, Maulds Meaburn, selling at auction in July for £1.26 million.

There is an increasing awareness, both out with and within the farming industry, that market forces are driving more than the price of the end product within the various sectors and that these forces are also exerting a considerable influence on the availability of land for sale.

The decision to sell farmland is now influenced by an increasing number of external and internal factors, all of which require careful consideration and planning.

Within the last eighteen months or so there has been a steady rise in the amount of land coming on to the open market for sale either by Private Treaty or Public Auction.

The business acumen of farmers and land owners means that they are acutely aware of the changes taking place within the agricultural industry, and an increasing number are consciously making the decision to sell.

This sometimes difficult decision may be as a result of a wish to retire, the re-structuring of their business or just a desire to “wind down” before leaving the industry completely.

The influx of buyers from all sectors and other countries, with a willingness to invest in farmland, has influenced the price of land considerably within Cumbria and South-West Scotland.

With some farms making in excess of £7,000 per acre it has at times been difficult for local farmers to get the chance to purchase either neighbouring areas of farmland or move on to bigger units.

The upside of this boom has been to concentrate the minds of potential sellers of land, with a view to taking advantage of the current situation. Talking things through with professionals within the sector has never been more important.

As with the sale of any commodity, be it prime lamb, store cattle, grain or farmland, the need to market the product effectively is vitally important. Preparing and presenting a farm, or just bare land, for the market can take a reasonable amount of time.

There are any number of items to consider. These can range from tracking down the Deeds, or remembering where water pipes run, or which land is in an environmental scheme, or who is responsible for a particular boundary.

Presentation is as ever the key to success.

Broader issues regarding tax planning, and future investment of capital released are also very important considerations.

Many farms are now sold in conjunction with local agricultural marts and property agents who have the necessary expertise.

For the immediate future the market demand for land looks like continuing to be strong.

As the Single Farm Payment Scheme is better administered and is easier to understand so hopefully the amount of farmland coming on to the market is going to increase, particularly as farmers and land owners begin to realise the capital asset value, and the income stream available, from either selling or purchasing land as an investment.

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