23 August 1996

Spring business done & autumn activity started

By Louise Rose

MOST estates, farms and land marketed during the spring now are sold and agents who have little left on their books are gathering business for the autumn market.

And although the commercial farmer buyer has still underpinned the market so far this year, also there has been some activity from both the tax driven and residential buyer.

"Most buyers have been commercial farmers or farmer orientated with some outside funds – there have not been many purely investor-types buying," says Adrian Wilson of Bidwells.

However many of the larger farming units have been bought with rollover or reinvestment funds, says Crispin Holborrow of Savills who maintains that these investors can usually be identified by the sale prices often achieving that x % more.

The 1597-acre Hatton Rock, in Warwickshire was guided at £5m when marketed in June, but bought with rollover funds from development is believed to have achieved around £6.5m.

"Often sourced from the sales of land for supermarket sites, service stations and other development opportunities individuals and companies with these funds have re-emerged this year," says Andrew Pearce of the firms Lincoln office.

And they have mainly looked for commercial arable units of 1000 acres plus, but with a limited supply of this size on the market, have become less selective and been competing with the traditional farmer for the smaller lots, he says.

Having acted for the underbidder – a farmer – in a recent sale Ian Hepburn of Strutt & Parker says the reinvestment relief buyer benefits from having a greater latitude to their spending power.

"With a 40% saving on tax by reinvestment into agricultural property these buyers can afford to pay that bit extra," he says. And properties including the Iwerne Estate, Dorset, Knoyledown, Wilts and Bagnor Manor, Berks were purchased to benefit from reinvestment relief.

"The present political situation with the threat of a Labour government looming has also focused peoples minds into buying this year," he says.

Michael Lammyman of Knight Frank adds: "If Labour is elected the reinvestment relief rules are likely to change preventing businessmen from investing City-made funds into agricultural land, which could affect the market."

"Also compensation paid for land acquired for the upgrading and development of the A1M route could provide another source of investment into agricultural property," says Andrew Black of Savills, York.

And although the market appears to be localised – determined by the proximity to London – some agents report the return of the residential buyer.

Following house upturn

"Following the upturn in the housing market in London money is emerging out of the City as confidence in the economy improves, and there is some growth in the international buyer market too," says Mr Holborrow, "The sale of Wilbury Park, Hampshire wouldnt have happened two years ago," he maintains.

Also unless the house or setting is inadequate most estates are selling as a whole and he says that there are plenty of buyers with £5m to spend but few £5m estates.

And George Inge of the firm adds: "Due to its location, amenity and residential value, to the residential buyer a traditional chalk downland estate in Wiltshire is worth the same an acre as the best arable land in East Anglia is to the commercial farmer."

Citing the example of the Furneaux Pelham Estate, Herts, Jim Bryant, Bidwells says the mid-range of the residential market is the most buoyant, with interest in the main farmhouse far outweighing that received for the substantial hall.

And in Dorset noticeable interest from the residential buyer has been shown in the recently marketed Barrowland Farm, a 254-acre dairy farm at Toller Porcorum, near Dorchester which, including a six-bedroom period farmhouse and a some coppice woodland, is guided at offers in excess of £700,000 by agent James Harris.