By Hobbs Parker
It’s hard to believe it’s only been a year since market commentary for all property sectors focussed on the impact of lockdown and Covid-19. Having come through this we now find ourselves in a cost-of-living crisis with a fiscal policy response that marks an end to 14 years of exceptionally low base rates and cheap money.
Housing markets are beginning to experience a slowdown, with pricing holding up for now, underpinned mainly by a shortage of stock. The economy is on the brink of recession and there is caution present in the commercial and industrial sectors. Which brings us to the ever dependable, you can see it, touch it, walk on it (and kick it) asset of farmland.
The spring market saw some exceptional farmland blocks brought to the market in north Kent. Totalling around 750 acres of predominantly Grade I and II land, Kings and Queens Farm, followed shortly after by Land at Ifield Place, located at Shorne near Gravesend, are all sale agreed well in excess of the £7.5 million guide price.
Grove Park Farm at Hadlow, comprising around 23.52 acres of grade III temporary pasture, sold significantly in excess of its £225,000 guide price as a result of strong demand. Staying in north Kent, and following hot on the heels of Kings and Queen Farm, is a new instruction to bring approximately 285.75 acres of productive arable land to market, located inside the M25 at Wilmington near Dartford. Land at Barn End Farm is currently guided at between £3,175,000 and £3,3250,000 as a whole or is available in three good sized lots and subject to an overage agreement.
In Biddenden, Tatu Farm was marketed through informal tender. It comprised a useful smallholding with detached three bedroom ‘Colt’ bungalow (with agricultural occupancy condition) around 32.6 acres, with modern farm buildings, one of which has prior approval planning consent for conversion to a new four bedroom dwelling, with a sale agreed above the guide price range of £1,100,000 to £1,170,000.
In the summer, Coltsfield, a rural smallholding with four bedroom house for modernisation, barn and paddock, set in around 8.8 acres with spectacular views of the Medway Estuary, was launched and is under offer above the guide range of £650,000 to £700,000.
Off market, a well-equipped Wealden grassland farm comprising a detached period unlisted farmhouse and range of livestock buildings, together with pastureland and woodland, the whole extending to nearly 100 acres, sold very well, avoiding a public marketing exercise and agreed between two amicable parties.
Also under the radar we offer discrete advice in relation to purchases. We act on behalf of purchasers, having recently facilitated the purchase of a block of some of the highest quality grade I farmland for a farming client.
There is much to look forward to in 2023 and we start off with the newly launched Land adjoining Swain Road, St Michaels, Tenterden. This is a parcel of Grade III arable land with good road frontage to Swain Road situated on the outskirts of Tenterden. Guided at £375,000 and totalling in all around 43.23 acres.
Assessing your sale and purchase options against the backdrop of the Autumn Statement, note that there is a reduced Capital Gains Tax (CGT) allowance going forward. Currently it’s £12,300 for individuals, which halves from April 2023 to £6,000 and is cut again in 2024 to £3,000. Still on the CGT front, Business Asset Rollover Relief continues to be retained.
Inheritance Tax thresholds are frozen at £325,000 until the 2027/2028 tax year. The good news is that the Government has also (for now) retained Agricultural Property Relief and Business Property Relief, meaning farmland continues to be an attractive investment.
Scarcity in the market, and the main retention of capital and inheritance tax reliefs, will in our view ensure the marketplace for next year remains stable, with little change expected. The increase in the base rate continues to impact the cost of borrowing and this may impact the number of bids received. For those seeking a safe investment, the continued presence of cash and rollover buyers, and farmer buyers, will ensure good quality parcels will hold their own.
Please speak with our experienced team of directors and chartered surveyors for a no obligation chat about the land market and to discuss your options.