The Agricultural Team had a busy but challenging 2020 in respect of rural land sales. Despite the interruptions caused by the pandemic, we sold agricultural property equating to approximately £3.5 million in five counties, namely Northamptonshire, Cambridgeshire, Warwickshire, Bedfordshire and Lincolnshire, ranging from individual pony paddocks to a ring-fenced farm. Of those properties that we sold in 2020, the prices for arable land ranged from £8,500 to £10,500 per acre; £6,500 to £8,500 per acre for commercial blocks of pasture; and the average price for pony paddocks sold equated to approximately £18,000 per acre.
Coronavirus inevitably had an impact, and generally lengthened the sale process in 2020, due to movement restrictions and many individuals relevant to property transactions, forced to work from home. Where appropriate, we advise clients to maximise their rural property assets and consequent value, by securing relevant planning consents prior to a sale. Unfortunately, since March, Local Planning Authorities have been taking much longer to determine planning applications and are regularly asking for an Extension of Time; the conveyance process is also taking longer, as legal searches are taking much longer. Consequently, there are properties which we were hoping to launch last year, which have been deferred to Spring 2021
Covid has also generated some positive impacts, with many people wishing to have more space in their lives. We have seen a markedly increased demand for amenity property, such as pony paddocks, especially those in close proximity to good communication links.
As mentioned above, we have a number of properties to advertise for sale in this new year. If you have a property requirement, then please do register your requirements with a member of the Agricultural team, so you do not miss an opportunity. Please call us on 01832 732241.
Looking forward, we’re potentially entering some choppier waters for agricultural land sales and prices. The question is, how choppy will those waters become? The reduction in farm subsidies will inevitably put pressure on farm profitability. This could see banks tighten their lending restrictions, reducing what they will lend, and ultimately affecting what farmers can offer for land. The reduction in profitability may also cause a downward pressure on rents, which indirectly affect land prices, as investment yields are squeezed. Furthermore, the Chancellor of the Exchequer, Rishi Sunak has made no secret of the fact that he may overhaul Capital Gains Tax (CGT) to help repair the Government’s battered finances. Under his proposals, the maximum CGT rate of 28% could be raised closer to income tax rates, where the top rates are 40% and 45%. There is also talk of reforming some of the reliefs from CGT. The removal of ‘rollover relief’ would have a significant impact on the demand for land, as many farmers who have generated a gain often chose to replace the sold business asset with another business asset, otherwise known as ‘rolling over’.
However, with all that said, history shows that when the general economy performs badly, land prices rise, as investors often see agricultural land as a ‘safe haven’. There is also now a greater understanding of ‘natural capital’ and ‘biodiversity net gain’, and investors may look towards these opportunities to spread their risk, in these uncertain times. There is also likely to be continued demand from those wishing to replace land lost to infrastructure schemes, such as HS2; A14; East West Rail; A428: Blackcat to Caxton Gibbet.
It is difficult to predict a great deal in these uncertain times, but we believe that the agricultural land market will become even more divergent than it is currently. Prices for land adjoining the region’s towns and cities will remain buoyant from those competing to ‘rollover’, whereas prices for land in the more remote parts of our region may weaken, especially where interest is limited to those reliant on bank funding. Ultimately, we welcome the opportunity to work with you and advise in respect of your rural property assets.
Extraordinary events dictated by two national lockdowns, presented some unprecedented challenges to the Estate Agency team during 2020. Following some tough market conditions and a period of Brexit uncertainty, where sales had been challenging, an early glimpse of sunshine in the first two months of 2020 generated green shoots and a clear uplift in exchanges and completions on transactions that had been lingering, as well as some new and positive signs of a growing sales momentum.
In March came Lockdown 1.0 and Estate Agency was amongst the first sectors affected, with a ban on face to face activity – in our case, meeting the public for viewings and property appraisals. All activity was directed to online viewings and home working and efforts to keep our valued vendors on the market, regardless on depressed activity. As for so many, furlough was an inevitable result for several of our team, while the senior team remaining worked hard to keep the business on track, albeit remotely. Our client vendors almost without exception, stayed with us and trusted Bletsoes to not give up in these challenging circumstances. We enhanced sales by adding video tours, utilising social media and diarising future viewing opportunities. Significantly, the reality that life goes on, was never more exemplified than by the endeavours of our dedicated Lettings team, who managed to deal with maintenance matters and keep our much valued Landlords informed, orchestrating move in and move out arrangements for tenants, where legally possible to do so, while at the same time advising on and successfully managing any rent arrears due to tenants affected by loss of income. When lockdown eased and we returned to managed viewings across the business, Risk Assessments were in place and safe working protocols were prepared and tailored for each area and sector of our business, so that we could work and operate safely and appropriately within government guidelines.
The result of lifting movement restrictions after nearly three months of lockdown, was that the Genie really was let out of the bottle and we witnessed a surge in demand for house buying, not seen in the UK since 2016. There was pent up demand, resulting from individuals reviewing what they need from their home, such as home offices and outside space, together with the special government measures intended to stimulate the economy, such as Stamp Duty relief on all house purchases up to £500,000 until March 31st 2021. It seemed like the sales market went from nought to 100, almost overnight. We fortunately had the housing stock available, due the patience and commitment of our loyal vendors. The second lockdown was different, this time the government made it clear that the housing market must remain open. We continued to work, observing the need to wear masks, gloves, completion of checklists and health questionnaires and saw higher than average transaction and viewing levels than normally expected for the winter. Individuals continued to buy and move, enjoying the Stamp Duty break.
Pleasingly, we completed on a number of £1m plus homes in 2020. We have converted and listed half of our valuation appointments booked and my prediction for 2021 is that we will continue to see an improvement against the backdrop of the previous two years. I firmly believe, we have a locally robust employment area and those wishing to move out of cities can realistically commute from this area, whilst enjoying the benefits of a more rural lifestyle and as a result, prices in our region should remain stable. The message is clear …stay calm and come to Bletsoes!
I am proud of our business, our ethics as a trusted and long-established brand. Most of all, I am proud of the Estate Agency team - for their commitment and attitude to deliver the best results for our client vendors and our valued Landlords during 2020, regardless of the challenges. The high level of integrity, hard work and commitment to Residential Property will continue throughout 2021. We are here to help and would be pleased to discuss Estate Agency matters with you. Please do contact us on 01832 732188.
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