Malgwyn Evans of JJ Morris outlines what the key features of the South Wales land market were in 2014 and predicts what 2015 could bring.
2014 market – key features
A steady supply of farms on to the market found ready buyers, mainly from within the locality, with locals accounting for virtually all of land and farms sold during the year. Prices rose again, with quality bare land fetching close to £10,000/acre and in certain locations up to £12,000/acre.
The residential/lifestyle buyers were relatively inactive although small time private investors were ready to pounce on smallish parcels of land, paying a premium and thus inflating values.
2015 outlook – main market influences
- Prospects are somewhat gloomy, with falling milk prices and insecurity in the dairy industry.
- Weak cereal prices in the autumn knocked farmer confidence.
- Basic Payment Scheme will make big dent in Welsh farmers’ incomes.
2015 outlook – what will happen to land prices?
Farmers will be more cautious this year although they will still have to compete against non-farming businesses, particularly those with a renewable energy focus. I expect land values will remain constant with no swing either way.
How much land will come on the market in 2015?
Current land values might tempt some vendors to cash in, although in this region there is a strong family farming element and a reluctance to part with heritage. There are no early signs of any significant acreages coming forward in 2015.
Easiest farm to sell in 2015
Good blocks of land, irrespective of quality of house or buildings, will still generate a lot of interest if strategically located. Small blocks of poor land will still find investor/non-farming interest.
Most difficult farm to sell in 2015
We cannot see any recovery in the residential/lifestyle market, so smallish units reliant on a good house will prove difficult.