The freehold land and rental market continues to hold steady in the South East, seemingly more influenced by roll over investors and ‘inheritance tax’ purchasers than elsewhere. However on a purely production based analysis and ignoring external factors and the cessation of direct support in the future after Brexit, land prices could readjust in real terms if farm profitability does not improve, writes Richard Thomas of BTF Partnership.
Interest rates remain on hold but rising inflation is still the one to watch. With the value of sterling at a 32-year low, interest in the land market from foreign purchasers may be renewed.
Evidence of positivity in the South East comes from the tender of 100 acres of good quality land at Wingham near Canterbury over Easter where several offers in excess of £10,000 per acre were received for the three lots on offer, all of which are now in the hands of solicitors.
Across the Weald, Grade III clay loam remains valued and guided in the range of £7,000 to £8,000 per acre depending on location and accessibility.
The pressure if any is likely to be on smaller farm units in the short term, which might mean more land coming to the market. We still think it is wrong to predict significant land value changes in the South East, unless the outcome of the general election in June brings any surprises that surpass the UK’s vote to leave the EU. Many landowners will have breathed a sigh of relief as it was announced the introduction of new probate charges scheduled for May have been put on hold for the foreseeable future.
Nationally Q1 2017 is being reported by some agents to have seen a year on year decrease in the supply of land for sale by 42%. In Kent and Sussex, despite the national market being scarce of good quality instructions we have been favoured with instructions on several major farm and land sales including:
Reed Court Farm near Marden, Kent extending to over 400 acres. 65% of the land is classified Grade II and is arable cropping with a modern purpose built grain store with capacity for 1500 tonnes. There are about 100 acres of pasture, with the balance woodland and cover crops under a five-year Higher Tier Countryside Stewardship Scheme. This is one of the largest land parcels to become available in the Weald for several years and is available as a whole, or in two lots.
A major parcel of North Kent Fruit Belt land is Swanton Fruit Farm nr Sittingbourne, a 364 acre well established apple and stone fruit farm consisting of 206.22 acres apples, 111.60 acres cherries, 12.45 acres plums, 28.66 acres arable plus a modern general purpose building extending to 3,250ft², yard and a mobile home seasonal workers site with 20 static caravans.
Another sizeable farm to come to the market through our Heathfield Office is Sweethaws Farm, a residential and agricultural estate on the edge of the Ashdown Forest, East Sussex with 207 acres.
Located two miles from Crowborough, Sweethaws Farm is situated in a rural location and consists of a six-bedroom unlisted detached farmhouse, a pair of semi-detached farm buildings converted into two cottages and a detached three-bedroom colt bungalow.
Originally a dairy and beef farm, the farm buildings are arranged into two courtyards consisting of both traditional and modern buildings. The traditional buildings offer the possibility of change of use into further residential accommodation. The modern buildings measure around 11,000ft² and includes grain storage.
The land is divided into 108 acres of arable, 46 acres of pasture, used for grazing and haymaking and 51 acres of woodland, with potential for a small family shoot.
A more compact and versatile commercial and agricultural estate is Court Lodge Farm in East Farleigh that extends in total to approximately 85.69 acres and is split into two lots.
Lot 1 consists of the commercial yard and a range of buildings extending in total to approximately 8.75 acres including offices, workshops and cold storage facilities all with a rental income of around £145,000 per annum.
Lot 2 consists of north facing Grade I arable and top fruit land comprising 65.56 acres of arable and 16.33 acres of fruit divided into Pears and Bramley apples, both of which are coming to the end of their productive lives.
Elsewhere in the South East we have seen a reasonably buoyant spring market with smaller parcels of good quality farmland attracting several farmer bidders. We have also agreed a number of smaller former agricultural barns and buildings, with prior approval for residential conversion where there has been some competition between developers and lifestyle buyers.
In the current market here in the South East, achieving a fast and effective sale is dependent on the location and pricing from the word go for both land and property. As ever preparation is the key and time taken prior to sale ironing out matters of due diligence with the vendor and his solicitors is always time well spent when terms are agreed, as small issues not bottomed out beforehand can slow a sale or halt it completely.
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