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.
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.