English values up despite increase in availability
Land values in England have risen by 10% during 2005 despite a 27% increase in availability to 122,951 acres, says agent Savills.
The firm’s latest valuation survey, which is based on its own deals and other market evidence, puts the average value of land at 2450/acre up from 2230 last year.
“I’m a bit surprised,” said head of farm sales Crispin Holborow.
“I’m not saying there hasn’t been some nervousness, but I thought values might have come under a bit more pressure.”
Poor arable land in the east had fallen in value by 3.3% this year, but, overall, Mr Holborow said there was still not enough land available to satisfy demand.
“The figures are up almost 30%, but that is still not a lot of land.”
Upwards of 200,000 acres would need to be launched before the market came under real pressure, he reckoned, and even then it would
depend on type and location.
Values had also been supported to a certain extent by rising investment activity, added Mr Holborow.
The Savills’ vendor/buyer survey shows that institutional and corporate buyers accounted for 14% of purchases – an 8% rise on the year – and 18% of sales.
“There is generally more investor confidence in property.
People like the idea of banking land,” he said.
Farmers also increased their activity, making up half of all buyers, compared with 46% last year.
Lifestyle buyer activity fell 5% to 35%.
But Mr Holborow said this fall was not due to a decline in the residential market, but was more down to a lack of suitable property.
Rumours that large City bonuses were on the way were true, he said, and the impact was likely to spread out into the farms market.
“Some of the City guys are either in the market or they aren’t.
They are a good weather vane and at the moment they are very bullish.
I didn’t think we would still be showing people around farms at this time of year.”