Lifestyle sales are one in four of rural total
Lifestyle sales are one in four of rural total
By Andrew Shirley
LIFESTYLE buyers continue to play an active role in the farmland market, according to the results of a survey by national agent FPDSavills.
The firm reports that almost one quarter of its rural property transactions during 2001 involved non-farming buyers purchasing their first agricultural property.
This follows a gradual year-on-year trend started in 1997 when just under 15% of farms were sold to new entrants. This rose to 22% by 2000.
Given the deterioration of the stock market, general economic uncertainty and the events of Sept 11, it might have been expected that lifestyle buyers would have hung back from such large financial commitments. "I am surprised," admits senior rural property analyst Ian Bailey. "I do think confidence has been dented at the very top end of the market but that sentiment does not seem to have filtered down to other country properties."
Low interest rates were a key factor in encouraging prospective purchasers to take the plunge, reckons the researcher. And improved technology also played a part, he adds. "People can now work from home more easily and dont need to be so close to their office."
Almost one in four working Britons is now choosing to work from home rather than commute to the office, according to a study published this week by market research firm Datamonitor.
This strong demand for residential farms was reflected by a 12-month rise in the value of farmland in the south-west of England of over 4% (see graph). "The area is proving popular because its prices tend to be cheaper than around London and it is considered an attractive place for a second home," notes Mr Bailey.
"Across the south of England, 2001 was predominantly the year of the amenity estate as far as farmland sales were concerned," concurs Crispin Holborow, in charge of farm agency at the firm. "Over 50% of our farms and estates sold last year were below 350 acres."
But, in regions more heavily dominated by commercial agriculture, average values have tailed off slightly. In the east, prices dipped by around 3% during the year, although, against a backdrop of sliding agricultural returns, this could still be considered a strong performance.
"There is such a limited amount of land coming on to the market, demand is outstripping supply and the situation doesnt look likely to change in the near future," concludes Mr Bailey. *