Central South land market review and outlook

Richard Liddiard, Carter Jonas

2013 market – key features

The market continues to flourish with the importance of the M3/M4/M40 corridors and access to Central London is a dominant feature. The land may not be of the highest quality but proximity to London is a key driver. There have been a number of off-market sales to existing landowners seeking to expand and land is still seen as a safe haven whilst the economy is in recovery.

  • Prices rising, demand strong
  • Holdings expand to spread costs as margins fall and commodity prices softening

2014 outlook – main market influences

We are confident that as demand continues to outstrip supply, best in class farmland will rise in value and be keenly sought by farming and non-farming investors alike, who value the safe haven status and inheritance tax advantages that land offers. Quality however is key and as the rest of the economy shows signs of recovery, purchasers will be astute to differentiate between most productive and poorer land.

  • We are reaching the peak of the market for average or less well-equipped farms
  • Development sales will create local land bubbles

2014 outlook – what will happen to land prices?

There will be a more discerning attitude among buyers of land and farms as other property asset classes recover in the improving economic environment.

  • Best in class will increase by 5%
  • Average will hold own
  • Below average will fall by 10%

How much land will come on the market in 2014?

As institutions take their “profit” to invest in alternative asset classes we expect considerably more land to come to the market in 2014.

Easiest farm or land to sell in 2014

A 1,000-2,000 acre, well-equipped arable holding in the Home Counties with attractive principal residence, shoot, fishing and good access to London. The desire to purchase the English country estate is very strong and those who can afford it are well-funded and astute purchasers.

Most difficult farm to sell in 2014

Small, poorly equipped holdings with secondary land/housing will struggle where there is no neighbour interest.

Sale highlight of the year (pictured above)

An 8,750-acre investment sale in Wiltshire comprising 32 let farms, 31 dwellings together with buildings, land and woodland. The sale was an off-market transaction which underpins the strength of the private market where there is keen interest from individuals and investors who reflect the strength of rural property which has now been a safe haven for more than 30 years.