Quiet start in Cambs as Fen prices show promise

In 2005 approximately 4600 acres were brought to the open market for sale; of that area about 1600 acres remains unsold.

It has been a quiet start to 2006; we are now into the second week of February, and no significant new sales have come forward.

The largest offering of last year was the 950-acre Keyworth House Farm, a traditional Fen agricultural investment.

The largest vacant farm was Cottenham Road, Abbey and Meadow Farms at Histon, sold by Bidwells.

It comprised just over 611 acres, with farm buildings, livery business and, located adjacent to the village of Histon, offered some interesting long-term hope value.

These two were exceptions, however.

Most of the units to come to the market were smaller than 200 acres.

This is surprising when you consider the average holding size in what is essentially a commercial arable farming county.

Perhaps less surprising was that the majority of sales were bare land and commercial farming units, rather than bijou residential farms.

In south Cambridgeshire bare land values have been in the region of £3000/acre.

Strong local demand for some of the Fen farmland has, in at least one case, pushed prices over £3000/acre for quality black and silt land, which is a sizeable uplift from 12 months ago.

As seen elsewhere in the country, demand for well-located amenity land has been strong, with prices between £7000 and £10,000/acre.

The area achieving some of the best sales is land with hope value.

Bidwells’ 600-acre offering at Histon received over 20 best-and-final offers, most of which were from institutions, developers or private investors who are driven by the tax benefits of agricultural property ownership and future windfalls.

Another of our sales was 15.72 acres at Swaffham Prior, seven miles north east of Cambridge.

Guided at £165,000, we were staggered by the level of interest and delighted to achieve a sale figure of almost three times our guide price. Again, much of the interest was from land banks and investor buyers.

With the shortage of supply, demand remains good for well located, quality holdings.

Farmers are still very much in the market, and as might be expected, the units in the Fen have gone to local farmer buyers.

Most of the overseas interest in the county has been from buyers across the Irish Sea, to whom Cambridgeshire looks relatively cheap.

The problems of the single payment scheme continues to give buyer and seller a major headache and is now a major stumbling block in permitting sales to move quickly through the legal stage to exchange.

Now the major timing issue is full notification of entitlement.

Will this take place as promised so deals can be concluded before the April deadline or will vendors need to keep farming in 2006?

Although little new stock is available, I do expect we will see more come to the market later in the year.

I do not predict a further 15-20% increase in land values as we saw in many areas during 2005, but the investor buyer will still be a significant presence for any of those parcels of land offering some speculative hope value.

With the much-discussed City bonuses now available I would like to have a well-located residential farm to sell during the early part of 2006, as I suspect this sector of the market could be rather better than 2005.