2006 has already proved to be a busy year for BCM Bays Curry McCowen in Hampshire and its surrounding counties, with over 2800 acres of land bought through our office already.
We are also bringing the 3800-acre Hursley Estate to the market jointly with Savills at this moment.
Other than generally causing a blockage to the supply of land to the market, the single payment scheme has led to the creation of payment entitlements; the conundrum that besets us is what value does that contribute to the land?
Well, the market will tell.
But given that the value of the entitlements had been initially suggested to be 2.5 times yield and now seems nearer 1.5 to 1.75 times (depending on the entitlement yield level), it is my feeling that the entitlement situation will have far less of an effect on land prices than many feel, and less and less of an effect as we move through the scheme years and the government increasingly claws back more aid through modulation.
As has been publicised in these pages in recent weeks, more land has come on to the market including a 1000-acre estate near Winchester and 800 acres of bare land near Whitchurch.
Given this and complications from the SPS, some might expect the supply and demand balance to alter.
The opposite is true in Hampshire — and I suspect over much of the country.
The buyers are there and they are hungry to buy land.
Hampshire benefits from being a beautiful rural county, with rolling countryside, some exceptional shooting and fishing, and attractive market towns, such as Alresford and Winchester, while also having excellent road, rail and air communications.
London Waterloo is an hour from many parts and the continuing rise of Southampton International Airport seems to be a significant factor in many buyer’s minds.
Most of the buying of farms so far this year through BCM has been completed privately and for retained clients.
They were a mixture of farms, from flat Grade 2 arable land through to an undulating farm with excellent sporting potential.
Hampshire, like any county, has disparate land types and therefore varying land values.
Broadly speaking, the values being achieved vary from up to £30,000/acre for small areas of land — fewer than five acres — through to in excess of £3000/acre for arable land.
When looking at land values, there is increasingly a distinction between land that is entirely set up for arable farming, and the amenity estate with a mix of woodland, conservation and downland.
The former, although it may support 4t/acre of wheat, is sometimes not the most desirable to a significant portion of buyers.
There are still plenty of buyers looking for land solely to farm it, but the proportion of those coming under the “lifestyle” banner is significant.
In my view, the sales that have come up to date have largely been due to the death or retirement of farmers — often with the younger generation not wishing to carry on farming.
It is simply not the case that farmers are having to sell because incomes are low.
It is our view we will continue to see significant demand for land in Hampshire.