Arrival of entitlements sees land market move

The beginning of 2006 seemed to be the calm before the storm with relatively little land coming onto the market.

But late February saw the entitlement statements drifting in, giving us the long-awaited values and enabling clients to move forward with sales of land and farms.

The expectation has been that the land market will pick up post CAP reform and bring balance to the current high demand.

Cheshire is the second largest dairy county after Devon and supports over 900 holdings.

However, the local press has claimed recently that nearly 300 of those holdings will face extreme pressure over the coming years due to falling milk prices.

This will inevitably force some farmers out of business and hinder the young farmers wishing to enter the industry.

With more farmers leaving the dairy industry it is likely to bring more land onto the market.

This will open the door for lifestyle and investment buyers and could effectively increase land values.

This, in turn, could hinder Cheshire farmers even more if those trying to increase acreage are unable to compete with the more affluent buyer.

An average size of farm for Cheshire would be 200-250 acres and many that come onto the market are smaller than 200 acres.

Whole farms are often divided into lots sometimes realising high values of £10,000-£15,000/acre.

These are typically being bought by the equestrian market.

Land fetching the highest values and interest has been land with hope and development potential.

We have recently sold 10 acres in north Cheshire for £7000/acre and a small parcel of three acres for £16,500/acre.

Typical bare land values in Cheshire that don’t attract the equestrian or investment buyers are £3000/acre while some of the more productive land may fetch £3500/acre.

Denton Clark currently has a 158 acre unit with large manor house and substantial outbuildings on the market at a guide price of £2.5m.

We are finding that medium to large farmhouses with 30-50 acres of land are selling extremely well.

One recent example was Stamford Mill outside Chester, comprising farmhouse and 33 acres.

We were staggered with the amount of interest in this sale mainly from lifestyle buyers and were more than happy with the final sale figure.

Another good sale for Denton Clark this year was Clay Lane Farm.

The sale comprised a farmhouse and 11 acres with a guide price of £595,000, with an option for a further 51 acres.

Again, the majority of the interest came from lifestyle buyers but this just confirmed their importance in the marketplace within Cheshire.

Cheshire dairy farmers are reporting record losses and more and more are leaving the industry.

I believe the investor and lifestyle buyers will begin to take the place of long-standing dairy farmers.

This could see land prices rise and may give the property market within the region a boost.

But at the same time it will make it harder for new entrants and existing farmers wanting to expand their acreage.

We believe that there will be an increase in land sales coming into the summer period.

Many of the smaller parcels of bare land will undoubtedly sell well at auction while we also predict that there will be some larger dairy units coming onto the market this summer.