North West land market review and outlook
By Will Douglas & John Milburn, Smiths Gore
2013 market – key features
In 2013 the North West mirrored the general land market, suffering from continued lack of supply of quality land and scant opportunity to pick up decent-sized commercial farms. The 8,393 acres publicly marketed so far in 2013 in the region is a similar level to 2012 but is some way behind the historical average. This has created pent-up demand and where good quality farmland in the right locations has come to the market, some exceptional results have been achieved – figures approaching £10,000/acre are not unheard of.
2014 outlook – main market influences
- Supply of land to the market
- Confidence and stability in commodity prices
- Banks’ continued willingness to fund land purchases
- CAP reform and environmental scheme funding
2014 outlook – what will happen to land prices?
Smiths Gore’s farmland price model forecasts average growth across England of 7% in 2014. For the North West, strong growth is predicted for the best land in prime locations, but more marginal and less desirable land will not see this level of growth. Knowing the local market will be key to selling well in 2014.
How much land will come on the market in 2014?
We hope more land will to come to the market in 2014. Lots of potential sellers are waiting to see how the market develops so 2014 could be the best year yet to sell in.
Easiest farm or land to sell in 2014
Blocks of good-quality free-draining grass or arable land in the best locations will continue to see the greatest demand and highest prices, as will 300-600 acre mixed farms with modern equipped farmsteads, farmhouse and cottage.
Most difficult farm to sell in 2014?
The more marginal or upland land which doesn’t have significant HLS or other grant income may prove difficult to market in 2014. RDPE funding has ceased and environmental schemes closed to new entrants in September 2013. The impact has yet to be tested but these schemes had a significant effect on returns for farming upland or fell land. Until there is some certainty on availability of new schemes, buyers may be cautious and sale prices may suffer.
Sale highlight of the year (pictured above)
The auction, in March of almost 99 acres of land and buildings at Thursby, nine miles south-west of Carlisle, Cumbria. The farm is in a renowned stock-rearing area and comprised two blocks of productive grassland and a decent range of farm buildings. After fierce bidding it went to a local farmer for £1,720,000, equating to £17,453/acre.