Land prices are proving volatile across the West Country as more discerning buyers pressurise prices at sales and auctions.
That’s according to Ben Compton from Bruton Knowles’ agency team, who said at the Three Counties Farming Conference that an uncertain market means buyers and sellers need to balance the risk and opportunity in today’s market.
“There are a number of issues influencing market values such as supply, demand, farm profitability and the prevailing tax regime – but land values still compare favourably with some nearby European countries.
“Land is seen as a stable and attractive investment with the current relatively benign tax regime in the UK. Diversification and development are also actively encouraged to make better use of a finite resource.”
Ben went on: “As we predicted earlier in the year, land values in the West have become something of a postcode lottery as sale and auction returns vary from district to district.”
But regional sentiment for rural property and land remains positive.
“We continue to see significant variations across the region with an auction in Worcester realising between £7-8,000 per acre dropping to just £6,000 per acre in Bristol but hitting £7,500 further south in the Chew Valley.
Herefordshire benefits from a strong local market but with a more realistic approach to pricing recently, however £10,000 per acre is still possible in a competitive sale.
Gloucestershire is seeing particularly wide disparity across the county but private sales can still far exceed the national average.
Ben said prices in local ‘hotspots’ remained strong in areas where sale criteria enabled capital gain to be re-invested for rollover relief; where non-farming interest was likely or where there was particularly strong neighbour bidding.
“All this makes valuations exceptionally difficult – but good advice and local knowledge can still maximise the value of your land.”
Ben said supply, demand and finance were important factors influencing values - and landowners often knew exactly which bit of land they wanted and were often in the driving seat when it comes to price.
“People are getting a lot more cautious and a lot depends on location. Purchasers are wising up and realising that they may be the only bidders in the market. They are the only people who want it so why would they pay top price?”
Ben said quality of the land – and of the farmer – also had a bearing on prices achieved.
“Good farmers still want to expand. Thirty year money is comparatively cheap to borrow. If prices are getting wobbly people should be weighing up the risk and opportunity of buying up what’s out there.”