West and South Wales land market review and outlook

By Malgwyn Evans, JJ Morris

2013 market – key features

The good weather throughout the year produced plenty of grass and a fine harvest and, with record high milk prices creating a “feel good” factor, renewed farmers’ confidence.

Virtually all farms including those which stuck in 2012 found ready buyers this year with prices generally up some 10% to 15% on previous years. Most local land agents having cleared this old stock now find farms hard to replace and I predict fewer farms will come onto the market in 2014.

Local buyers represented virtually all our land purchasers with relatively little outside interest shown. Bare parcels of land rose to around £8,000/acre for good quality grassland but an auction two weeks ago saw fierce bidding with prices reaching £10,000/acre.

2014 outlook – main market influences

Demand will continue to be strong although vendors may become too optimistic and ambitious in their asking prices.

2014 outlook – what will happen to land prices?

Prices may have already reached a peak with many believing this new benchmark is unsustainable. Changes in single farm payments will inevitably cause some caution within the industry.

How much land will come on the market in 2014?

Again volume will be tight with more and more vendors retaining land for the tax advantages of Agricultural Property Relief from Inheritance Tax.

Easiest farm or land to sell in 2014

Any farm offering expansion to dairy units will remain in high demand. Poorer quality and lesser value land will always be snapped up by private investors still believing land is that safe haven.

Most difficult farm to sell in 2014

The residential/lifestyle buyer remains fairly inactive and anything fairly rundown will prove difficult to sell.

Sale highlight of the year (pictured above)

Meinigwynion Mawr, Gorsgoch – a 323-acre grassland farm auctioned at the end of November following the death of the owners. Sold in five lots to realise £2.96m – the homestead with 138 acres made £1.25m, while 52 acres of bare land sold for £56,000 (£10,700/acre). A third lot of 85 acres (80 clean) made £630,000 (£8,000/acre) while lot 4 of almost 14 acres sold for £170,000 (£12,000/acre). The final lot of 35 acres made £350,000 (£10,000/acre).