After an initial flurry of early end-of-tax-year
marketing - which saw a sixfold increase in supply of farmland
compared with early 2007 - until September, the overall supply in
the eastern counties settled back to a slightly higher volume than
last year.
The market in Suffolk has been a little quieter than last year
and the Lincolnshire land supply has also fallen back as the year
has gone on. But overall there is still demand for farmland and
high-end estates.
The biggest completed sale of the year in this region was the
Tetworth Hall Estate in Cambridgeshire. The 2499 acres sold quickly
over its £20m guide price, illustrating that for the right
property, there is still the money to buy.
High sales
The tone for the start of 2008 was set by the 1244-acre Mashbury
Hall Estate in Essex, which sold substantially over its £8m guide
price to a local buyer, but with strong competition locally and
further afield.
The early part of the year saw some exceptionally high sales
encouraged by the surge in commodity prices and the news that land
prices were on the increase. It was in the commercial farmland
market where there was plenty of evidence of strong competition,
driving prices upward and seeing bare land in south Cambridgeshire
make over £6000/acre, Grade 1 land at South Kyme in Lincolnshire at
over £7000/acre and even black fenland and silt, which only two
years ago might have struggled to make £3000/acre, has more than
doubled in price.
The rate of increase in prices has slowed in recent months, but
demand for quality bigger units remains strong. As with any market
that starts to reach heady levels, some vendors want to set
over-ambitious guide prices and inevitably a number will be
disappointed.
Know your market
Whether in Lincolnshire, Cambridgeshire, Suffolk or Norfolk,
some sales of bare land have achieved values of £6000/acre. But it
is generally the better sales that are remembered. Knowing your
market place has never been more important and by no means all land
sales have made these high levels, or will do.
September has heralded a spate of bigger blocks entering the
market in Norfolk, Bedfordshire and Hertfordshire and this supply
may well influence demand in these areas. As we move towards 2009,
despite prices being higher, the weaker pound may well make the
land look attractive to foreign buyers, although it is probably
fair to say the Danish and Irish have not been such active buyers
in recent months.
I suspect the gap between the good and the less good will widen.
For smaller blocks, location and the strength of neighbours'
interest will be crucial. The appalling cereal harvest conditions
may well soften the appetite to buy for some neighbouring farmers
during 2009.
The credit crunch and a pessimistic outlook for the economy as a
whole have impacted on the residential and commercial property
markets but, if you have the money, land still looks a safe
bet.