The land market in the West Midlands – outlook
Sale highlight of the year: Sheriffs Lench, Evesham - 429 acres of bare arable land and woodland surrounding a small Worcestershire village with development aspirations. Sold above £3.25m guide price. Anthony Mayell of Fisher German outlines what the key features of the West Midlands land market were in 2014 and predicts what 2015 could bring.
2014 market – key features
Farmland in the West Midlands is a microcosm of the UK, blending the mixed farming of Worcestershire and Staffordshire with the arable hills of the Cotswolds, the rich cropping land of Shropshire and the versatile arable and fruit growing fields of Herefordshire. But just as farmland markets across the world continue to defy logic, so the market in this region has remained strongly resilient in 2014, despite the downward pressure on commodity prices.
- Grade 2 and 3 arable land typically £9,500-10,500/acre, and higher for relatively scarce commercial blocks of more than 200 acres.
- Farmers buying to intensify existing enterprises and expand into renewable energy.
- Development opportunities, minerals and diversification are now key drivers.
- Widening gap between best-quality land and the rest.
2015 outlook – main market influences
- Land has good counter-cyclical investment qualities, and development profits may bring more non-farming buyers to the market.
- Demand for land for renewable energy crops will grow.
- Political uncertainty and pressure on farming incomes may bring smaller farms to the market.
- Family-owned farmland is tightly held, the owner-occupier debt-to-capital ratio is low, and borrowing remains at historically low rates.
2015 outlook – what will happen to land prices?
A slowing in price growth trends as buyers target value for money.
- Best arable – up 7.5%
- Poor grassland – unchanged
How much land will come onto the market in 2015?
Much the same as in 2014.
Easiest farm or land to sell in 2015?
A well-equipped or adaptable arable unit, minimum 500 acres, in a peaceful valley setting, close to towns of Cheltenham, Worcester or Shrewsbury with motorway connection. Ideally with planning for an imposing farm residence, challenging farm shoot and trout stream – perfect for the re-emerging private buyer or foreign investor with farming aspirations.
Most difficult farm to sell in 2015?
Low grade 150-acre grassland farm in remote north facing location with modest farmhouse, little or no scope for diversification, and no land-hungry neighbours.