Hobbs Parker - A Review of the Agricultural and Rural Property Market

A Review of the Agricultural and Rural Property Market

Fast Track Sales at Strong Prices

A Review of the Agricultural and Rural Property Market by Colin Hosmer (Published in the South East Farmer - May 2000)

Sales Have Been Readily Achieved...

At the close of 1999 I reported that more land had come onto the market in the Autumn period and certainly the region has seen increased marketings in the first three months of the new millennium compared with the first quarter of the last few years. What is more significant is that sales have been readily achieved without a drop in price.
The Royal Institution of Chartered Surveyors have produced figures showing that there was, in fact, nationally an average rise in farmland prices of 9% during the second half of 1999.
So the pundits, including myself, who predicted lower land prices as a result of the drop in farm incomes in every sector of the agricultural industry have been further

Shortfall in Supply

Despite my comment of more land coming onto the market in the last three months there is still basically a shortfall in supply. This, coupled with a capital taxation system that encourages investment in agricultural property, relatively low interest rates and an ever growing interest from non-agricultural buyers have more than counteracted the effects of diminishing returns.
On this latter point there are some brighter pointers with estimates showing that the decrease in producer prices slowed to an estimated 4% in 1999 compared to the average 11% fall in producer prices in the previous year.

Residential Market is Booming

As we all know the residential house market is booming and the effect of this is bound to spill over into the residential farm market. It is noticeable that non-farmer buyers now consider the purchase of larger acreage holdings than was the case even a few years ago.

City Bonuses

Good city bonuses and a generally buoyant stock market coupled with low interest rates and the growth in e-commerce businesses is creating a young and cash-rich generation keen to own country property with the benefit of peace and quiet. Banks and lenders continue to be consoled by high asset values and provided they have loaned with

Significant Sales

Some significant sales by Hobbs Parker in recent months include the sale of the farm land and buildings at Hoath Court, Hoath, near Canterbury where some 434 acres of Grade I, II and III land with modern farm buildings, including 1,000 ton grain storage achieved a price in excess of its guide of œ2,000 per acre.
Moving across the county to the Kent Weald we have sold Sweetlands Couchman Green Farm at Staplehurst, a retirement sale, where the farm was on the market for the first time for nearly 50 years. Situated to the north of the village there was a Listed 5 bedroom period farmhouse together with Kent barn and oast-house both with detailed approval for conversion, general farm buildings and mainly Grade II land, having extensive frontage to the River Beult. Offered as a whole with a guide price of œ1.1 million the farm was sold in two sections with a local arable farmer acquiring the majority of the open land but leaving a significant acreage with the house and buildings.

Private Sales

Private sales, without recourse to open marketing are on the increase; but public auctions in the New Year have flagged up their own strong signals, several properties being sold to advantage prior to going under the hammer. The remaining 34 acres of off-lying parts of Sweetlands Couchman Green Farm were put into a March auction with one lot being sold prior. The remaining 25 acres of permanent pasture, sold in lots, and averaged well over œ6,000 per acre! At the same sale 24 acres of IACS registered arable land at Hartlip exceeded its pre-auction guide price of œ70,000.
Another agent had a significant auction result subsequently, when over 380 acres of orchards, fallow land and woodland at Brenchley were offered. I understand that the majority of the land found new owners who were local, with several prior sales, and prices of up to 2,600 per acre being achieved at auction for substantial areas of cropped orchards and woodland, where the residential factor was negligible.

Retirement Relief

A few extra sales are being generated by the reduction in retirement relief, whilst some large areas of land which might otherwise have been sold, have been let on Farm Business Tenancies. The pattern of sales in recent times has emphasised the trend of farming enterprises becoming larger. Increasingly, buyers do not want to actually farm the land themselves and find it convenient to come to an arrangement with a nearby farmer.

Ashford's Future Growth

Deputy Prime Minister John Prescott recently announced a study to discover Ashfordİs potential for future growth, coupled with government plans to build 43,000 new homes per annum in the South East. There seems litle doubt that the town will grow substantially; how quickly is the material question? The number and extent of Brown Field sites are limited! There is no evidence of a flush of agricultural property coming onto the market and in my opinion we are unlikely to see any major market changes in this region.