The Agriculture Act with the reduction of BPS payments will have a significant impact on farming businesses and is likely to bring land holdings to the market in 2022 and beyond. The Environment Act and introduction of biodiversity net gain from November 2023 will bring opportunities to landowners within reach of development schemes with land required to meet these requirements. The UK Government’s target to reach net zero emissions by 2050 has a 10-point plan, including the trebling of woodland creation in England. The Welsh Government in April declared a “climate change emergency” and by August at least 12 farms were reportedly sold to companies looking to plant trees as part of their carbon offsetting strategy. These interests will have to compete alongside farmers, developers, lifestyle purchasers, and viticulturists which suggests the land market will remain buoyant in the South East. Despite concerns of tax changes in the budget, Capital Gains Tax and reliefs for Inheritance Tax remain untouched.
Reflecting on 2021 we have experienced greater supply and demand this year across all asset types.
Romney Marsh was a hive of activity; the launch of Street Farm, Newchurch saw around 145 acres of grade II prime arable ground sell as a whole with competitive bidding achieving a sale well in excess of the £9,500 per acre guide price. The retained 770 acres and grain store were successfully let on a five-year fixed Farm Business Tenancy. In the autumn, Churchfields, Burmarsh comprised a block of Grade I grazing marsh with consent to carry out cultivations via an EIA screening decision which is now under offer in two lots, again in excess of the guide.
In Biddenden, Shorts Wood Yard, a smallholding with AOC farmhouse and 17 acres, was marketed in June, experienced around 40 viewings and sold in excess of its £995,000 guide price to a local buyer.
The demand for barn conversions also remains strong with the sale of Cot Farm Barn, Biddenden, set in 7.5 acres, agreed in excess of its £575,000 guide. In Elham the prospect of a “doer upper”, a period two bed bungalow, outbuildings and around 8.55 acres in an elevated position with views across part of the Elham Valley within the Kent Downs Area of Outstanding Natural Beauty generated a frenzy with 98 viewings in total and sold significantly ahead of its upper guide of £575,000.
Parcels of woodland are becoming increasingly desirable, and the sale agreed at Tawny Wood, Bethersden of 13.25 acres of mixed broadleaf and conifer wood with river frontage is under offer ahead of guide. Likewise, Denge Wood, complete with woodland cabin, exceeded expectations, selling ahead of its £395,000 guide.
Off market transactions remain as active as ever. In the early part of 2021, we concluded a further sale in excess of 100 acres of land near Hollingbourne for the expansion of an existing vineyard. This followed a sale in 2020 of approximately 140 acres. More recently, Mount Farm Harrietsham sold for in excess of £14,000 per acre. The sale comprised 98 acres, which included 65 acres of arable and grassland and 21 acres of woodland and fishing lake. The plan is to plant 52 acres of vines and there is an appetite for further suitable land, so please get in touch if you are thinking of selling.
There have been several opportunities for sitting tenants to either purchase their freeholds or agree a surrender package for their tenancy. Advice and a pragmatic approach to the unlocking of value and negotiating terms agreeable to both parties are vital to ensuring a successful outcome.
Given the value and complexity of farming businesses, taking early advice is key. It is important to be ready and prepared, whether you are buying or selling.
Looking forward to 2022, we are already aware of a number of significant opportunities preparing to come to the market.