East Midlands land market review and outlook

By James Brooke, Bidwells

2013 market – key features

As in 2012, we continued to see very strong demand for quality farmland, particularly among large-scale commercial blocks. The preference for bare land or farms with limited residential value (say 15-20%) still dominates.

• Strong demand
  
• Rising values for commercial large-scale farming opportunities
  
• Private purchasing opportunities increasingly important to satisfy demand
  
• Effect of rising values means lesser quality land on occasions is selling at surprisingly high levels

2014 outlook – main market influences

• Continued undersupply, values driving forward for good quality land
  
• Stabilisation of ordinary cereal-producing land values

2014 outlook – what will happen to land prices?

In some cases for the lesser quality ordinary cereal producing land, values will remain fairly static. Large-scale, well equipped commercial blocks with modern infrastructure facilities will continue to be sought after, with prices rising where local and national competition is generated. Some 15-20% above guide prices could easily be expected.

How much land will come on the market in 2014?

This time of year, generally speaking, we know of some opportunities for the spring. Looking into 2014, it would appear the market is going to be extremely thin. Whether it is going to be 29% down as it was this time last year, only time will tell.

Easiest farm or land to sell in 2014

Large-scale commercial equipped farming units with low-value residential element. In most cases where these have been available in 2013, they have sold quickly, often to investors, with competition from the local farming community either as individual businesses or as consortiums.

Most difficult farm to sell in 2014

Residential farms with large-scale residential property and a high degree of poor-quality land. This has been proved with large residential estates in 2013 – the solution being to split them up into attractive packages to meet market demand, such as residential purchaser and agricultural investors.

Sale highlight of the year (pictured above)

Commercial farmland near Stamford, Lincolnshire – 862 acres of Grade 3 land in wheat, barley and oilseed rape with a small pasture area. Six-bedroom farmhouse in need of renovation, traditional and modern commercial farm buildings including grain storage. Guide price for the whole was £6.25m, sold to an investor at marginally in excess of the guide price. Market conditions required the vendors to be flexible.