Demand for commercial arable farmland is so strong in some areas that houses are of no interest to buyers in farm sales.
“Potentially there are some bargains to be had out there, as investors may look to sell the residential element on, where it is not seen to be detrimental to the value of the associated land,” said Charlie Paton of Savills.
“We have seen bare land or land with minimal residential value achieving premium prices over and above the guides in recent months. Parts of the Brauncewell Estate (Lincolnshire) were straightforward commercial arable blocks of land with good agricultural buildings and little or no residential property.
“This type of farm suits the criteria of both farmers and the majority of investors very well. When more of a farm’s value is tied up in residential but lacks the ‘trophy house’, not only does this require more hands-on management from the investor but it also has less significant tax benefits. Substantial residential properties are often seen by farmers as a superfluous expense.”
Savills has now completed the sale of the 1961-acre Brauncewell Estate to farmers and investors in four lots for more than its £13.3m guide price. Brauncewell showed the strength and depth of the market, especially for good commercial arable land blocks, but demand remained highly dependent upon location, said Mr Paton. Some lots made 10 to 15% higher than their guide price.