Despite some caution and cooling in the residential market nationally, the Yorkshire farm land market continues to go from strength to strength, with agents predicting that in 2008 there is still room in the market for an increase of upwards of £1,000 per acre if demand continues to outstrip supply.  This is in addition to the steady increases in prices witnessed over 2007 that has seen small well located ‘lifestyle’ parcels exceed £5,000 to £10,000 per acre and good quality productive land also rising in value.

Sarah Webster, rural agent at Northallerton based Bruton Knowles explains how changes to taxation have brought varying news for farmers and lifestyle buyers, potentially taking some toll on the market, “An increase in the IHT threshold to £600,000, latterly £700,000 was a significant rise, but it doesn’t offer a safe haven for many rural land owners concerned about assets not protected by agricultural exemption, so not surprisingly it hasn’t triggered much of a specific increase in activity from lifestyle purchasers. 

In balance the u-turn on capital gains tax (CGT), which will now leave all those who would normally benefit from taper relief and a 10% tax bill facing an 18% tax bill, could be seen to be responsible for a small increase in supply.  More land has been brought to market in the last quarter and some of this could well be from those farmers and landowners who are keen to sell before the 6th April 2008 deadline when CGT changes come into force.  It hasn’t had a major impact as it won’t have forced active farmers to consider selling but it will have crystallised the thinking of anyone already planning to sell in the short to medium term.”

Sarah Webster continues, “These taxation changes could be seen to have had some impact but the market was already buoyant and the ongoing issue of demand outstripping supply underpins this.  The strength of the market and a stabilising residential market means that the traditional approach of separating out the house from the farm and selling farms as lots is also being reconsidered by agents. We are just in the process of marketing High Moor Farm at Minskip near Boroughbridge, an ex County Council smallholding with 82 acres of arable and pasture land with its 4 bedroomed farmhouse and this will be offered as a whole for offers over £800,000.  This is also the case for farms with smaller land parcels like Mayfield House Farm, Tunstall, Richmond which boasts a very attractive stone farmhouse, traditional outbuildings and 7.5 acres of land which we are marketing again as a whole for offers over £525,000.

Equally despite warnings that many active farmers would simply consolidate their businesses over 2007 we have witnessed many farmers still looking to expand their land holding and buying more land this year.  We are confident that this trend will continue into 2008.  We are therefore expecting a good response to a range of land parcels we are bringing to market including 27 acres of productive arable land at Selby which is guided at £3,000 per acre, 15 acres of arable land at Barkston Ash near Tadcaster and 30 acres of arable land with dry store at Sherburn in Elmet near Tadcaster which is guided at £135,000.”

Sarah Webster concludes that the outlook for the land market in the new year should remain buoyant, “We have had a difficult last quarter of the year in legislative terms and we are obviously still awaiting the outcome of the EU CAP ‘health check’ which closes for consultation in the spring, but despite this the market has continued to go from strength to strength.  Farmers are still keen to expand their holdings and the lifestyle buyer appetite still exceeds supply so the outlook for the market in the New Year still seems very positive.”