After a relatively difficult 12 months for the property market things are finally beginning to look up in the North. It has been a year full of uncertainty with banks particularly hesitant to lend, however H&H Land and Property, with offices in both Carlisle and Durham, have noticed a renewal of interest in farmland over the summer.
Oakrigg Farm in the Scottish Borders, the sale of the farm has just been agreed.
Reassuringly, H&H Land and Property have seen almost a total clearance of farms which had been on the market for a period of time. Selling to a mixture of buyers these sales are positive proof that things are beginning to move.
One of the speediest sales the company have ever seen occurred within 6 weeks from advertising to exchange of contracts. Something that rarely happens these days.
Alistair Macmillan, who looks after H&H Land and Property’s Scotland portfolio says: “We attributed the initial deflation in land sales to the banks reluctance to lend. There was also uncertainty as to the economic position and an unwillingness by most people to spend or invest. Twelve months later however, their money is still sitting in the bank, and while interest rates remain low land is seen as a safe investment. Where money in the bank is seeing virtually no return there is always the opportunity to see some return through letting on the open market.”
“In the past we have seen investment coming from the South, now we are seeing investors closer to home, such as Yorkshire, showing interest. Houses and buildings are now seen as more valuable assets than they once were in the overall farming unit, which highlights that a poorly equipped farm is certainly harder to sell”.
Alistair’s predictions for the future are that good land will continue to steadily rise in value, however there is a larger gap in price between best quality and secondary quality land grades unless there is sporting, forestry or other interest.
David Thomlinson, English Property Advisor with the company held similar views on the market but reinforced that there were still opportunities to finance a purchase.
David does not see this surge in interest in farms and land
dissipating in the near future and he tells us why:
“Bare land is selling like hot cakes as are ring fenced farms. We have a waiting list of people wanting farms, both those keen to get their foot firmly onto the farming ladder, and those who want to increase their acreage.”
“For most clients, buying additional acreage is all about economies of scale. So by increasing their amount of land, they actually reduce the cost of each working acre”.
“On the Scottish side thousands of acres have land has already exchanged hands this year with a real variety of buyers. This included a 200 acre ex dairy farm at Maybole, Ayrshire which sold to local farmers, a 150 acre stock rearing farm at Moffat, Dumfries & Galloway, sale agreed to a buyer from Derbyshire. 160 acre dairy farm at Drongan, Ayrshire, sold to clients from Yorkshire and 192 acre beef and sheep farm, in Girvan, Ayrshire, sold to clients from Gloucestershire.”
“If you are looking at investment, expanding your current acreage or buying that first farm then the outlook is good and there are certainly finance options available. It is a matter of looking at your opportunities and making the most of a recovering market”.
For more information contact H&H Land and Property’s Carlisle Office on 01228 406 260.