Big demand for amenity & residential
DURING the year to Dec 1 , 1997, nationally arable land values remained similar but demand for residential and amenity type properties increased.
Recently some of the estates sold on and off the market reflected a 10% premium for the arable land compared with the commercial farm values (see table).
And research shows that the prices paid for grade 3 land is higher than for grade 2.
A high proportion of the grade 2 land sold was in East Anglia and Lincolnshire, but most of the grade 3 land was in the Midlands and the south.
Also despite recent talk of a likely 40% fall in farm incomes overall arable land prices have held up due to the increased demand for residential/amenity farms and estates in the right location.
Most of these property buyers are non-agricultural looking mainly for an attractive and well located unit.
The ability to buy the right farm in the right location has become more important than achieving a higher return from a more commercial unit.
However prices paid for grade 1 land are significantly higher than for other grades. Our experience of the sale of the Spalding Farms showed that considerable funds for well equipped grade 1 units were available when the total value of all the offers received exceeded £60m.
lThe sample for the year consists of 62,758 acres with a total sale price of in excess of £213m. All the farms are over 250 acres and were marketed privately or publicly.
Strutt & Parker,
London rural department
LAND VALUES 1997