The amount of land sold so far this year has increased sharply as farmers rushed to beat changes to capital gains tax legislation.
Taper relief and indexation meant land sold before April 5 could qualify for a much lower rate of capital gains tax. After then, changes in Alistair Darling’s first budget mean land sales will be taxed at 18%.
According to property agent Savills, land availability in the first quarter of 2008 rose by 41% across Great Britain compared with the same period last year.
This figure is backed up by the Farmers Weekly Land Tracker, which measures the amount of land advertised for sale in the magazine. By 28 March, almost 21,000 acres had been advertised, virtually 100% more than last year.
Private treaty sales
Many of these sales were by auction, which allows a sale to be wrapped up as soon as the hammer falls.
However, a number of private treaty sales have also been wrapped up in time to beat Mr Darling’s deadline.
David Cross of Savills’ Salisbury office put a 360-acre block of arable land at Fovant, Wiltshire, on the market on 15 February and has already sold it for well over the £5500/acre guide price.
He said a private investor paid almost £7000/acre for the land.
According to Ian Bailey, Savills’ head of rural research, average land values in England have risen 20% to £4450/acre.
Prime arable land was now worth £5075/acre across the country and had topped £5700/acre in the east of England – an increase of almost 26%.
Land sales, however, already appeared to have slowed down now it is too late to sell before this weekend’s CGT cut-off. The FW Land Tracker has fallen by over 50% during the past two weeks and Mr Cross said he didn’t expect an overall increase in land sales this year.
“Some people who don’t have an emotional attachment to their land might be tempted to sell by these high prices, but I think most sales will be down to the three Ds – death, divorce and debt.