The value of English farmland continues to power ahead, reaching an average price of £10,523 per acre at the end of June this year, according to the latest Chesterton Humberts Agricultural Estates Index. To the casual observer, farming’s golden image looks as bright as ever, but times are changing and, although demand for good-quality farmland continues to outstrip supply, rising costs and falling yields due to poor weather in recent years have resulted in an overall drop in farming income of 14%.
As a result, the agricultural sector continues to be heavily reliant on the supportive attitude of banks-an attitude that appears to be hardening, say Chesterton Humberts, with some lenders currently reviewing the quality of their loan books, particularly with regard to debt servicing. Moreover, seasonally adjusted data from the Bank of England suggests that net lending to the sector has been falling away since the beginning of the year.
Taunton-based David Hebditch, head of the firm’s rural division, explains: ‘Farm operators have had a rough ride over the past couple of years and pressure on balance sheets has been intensifying. Although the underlying asset value is seldom an issue, there is now added pressure as some banks look more closely at the ability of farmers to service debt.
‘The changing scenario has driven farmers to rethink their business strategies, and many small ones-especially small dairy farmers-who may need to invest in their holdings in the near future, are opting to sell up while land values remain high. A lifeline for such vendors has been the re-emergence into the marketplace of lifestyle buyers, who simply weren’t around a year ago. It also creates opportunities for investors who have been trying, unsuccessfully, to access the market,’ adds Mr Hebditch.
Going, going, gone
Conigar Farm sold for £1.2m
Farms sold by his firm to lifestyle buyers this year include Conigar Farm at Hemyock, near Cullompton, Devon, a ring-fenced residential and equestrian holding in a sheltered position in a particularly lovely part of the Blackdown Hills, close to the Devon/Somerset border. It comprises a detached four bedroom farmhouse, 50 well-managed acres of pasture and broadleaf woodland, a formal range of barns and stabling, plus other livestock buildings, and sold at a guide price of £1.2 million. ‘A year ago, we would have struggled to find a purchaser,’ Mr Hebditch confides.
Underdown Farm is under offer for £1.5m
Currently under offer to a lifestyle buyer at a guide price of £1.5m, is picturesque Underdown Farm at Yarcombe, near Honiton, Devon, which stands in lovely rolling countryside overlooking the Yarty Valley, with the resorts of Branscombe and Lyme Regis a short drive away. At its heart is a charming, Grade II*-listed farmhouse, with extensive farm buildings and stabling, surrounded by 53 sheltered acres of gently sloping farmland and amenity woodland.
The Paley Estate sold recently for £9.5m
But the residential farm sale of the year to date is surely that of the idyllic Paley estate near Cranbrook, Kent, sold by Chesterton Humberts in recent days at a guide price of £9.5m. The farm was purchased in 1917 by James Day, a successful farmer who went on to buy three more farms, leaving each of his four sons with his own farm in west Kent.
The Paley estate was sold following the death of his grandson, Jim, in 2012. It has a Grade II-listed main house, two acres of gardens, extensive traditional buildings, 11 cottages, and about 440 acres of grassland, orchards and woodland, with sporting rights in hand.
Giles Wordsworth of Smiths Gore provides an interesting insight into the dynamics of the current farmland market. Despite heavy demand from investors Knight Frank recently acquired an arable unit of more than 2,000 acres on behalf of an overseas buyer-large blocks of land are still a rare commodity, and only three properties of more than 750 acres were offered for sale in July-September this year. The total acreage offered in England and Wales in the first nine months of 2013 was 109,000 acres, compared with 79,000 acres in the equivalent period of 2012, and a regional analysis shows a sharp increase in the number of small farms offered for sale.
The busiest marketplace was the south-west of England, where 46 farms and 6,200 acres-an average of 135 acres per farm-were offered in July- September this year, compared with 28 farms and 4,400 acres in the corresponding period of 2012. Next came the south central region, where 42 farms totalling 6,400 acres came to the market, compared with 25 farms and 4,100 acres in Q3, 2012, followed by Yorkshire and Humberside, where 27 farms and 4,100 acres were offered for sale in July-September, 2013, compared with 16 farms and 2,500 acres in the same period of 2012. In contrast, only 31 farms (6,400 acres) were offered for sale in the northeast and east of England in the third quarter of this year, compared with fewer still-28 farms and 6,200 acres-in July-September, 2012.
Todridge Farm, £2.75m with Savills
With almost no farms left on the market in England and Wales, lifestyle buyers with serious farming ambitions could ‘hit the remote’ and head for Northumberland, where Savills (01904 617800) are selling tranquil Todridge Farm at Great Whittington, near Corbridge, at a guide price of £2.75m. It offers a substantial six-bedroom family house, four cottages, an extensive range of traditional farm buildings, 339 acres of undulating grassland and wildflower meadows and 12 acres of amenity woodland-354 acres in all.
A Wiltshire highlight
Rye Hill Farm at Longbridge, sold for £5.6m
Reflecting the current strength of the farmland market this year, Carter Jonas have launched more than 18,000 acres of land with an asking value of more than £185m. The highlight of the campaign was the sale to a lifestyle buyer (jointly with Strutt & Parker) of pristine Rye Hill Farm at Longbridge Deverill, Wiltshire, at a guide price of £5.6m. Impeccably situated between Salisbury and Bath, the successful arable enterprise comprises a six-bedroom period farmhouse, a traditional barn used as a wedding venue, two cottages, a bungalow, modern and traditional farm buildings (some with commercial use) and 388 acres of land.
Highs and lows
For James Brooke of Bidwells, the land market in the eastern counties has been dominated this year by a lack of supply to the open market, with fierce competition for the few farms available resulting in £13,000 an acre being paid for heavy cereal land in Norfolk this autumn.
Elsewhere, prices of cereal land reached £15,000 an acre in Essex, £14,000 an acre in Lincolnshire and £11,000 an acre in Suffolk. As in 2012, small residential farms in Norfolk and Suffolk have often been split, although Hall Farm at Elsing, Norfolk, was bought as a whole by a local family and Hall Farm at Saxlingham Nethergate, south of Norwich, was also sold as a whole.
In Essex, where under-supply has been a dominant factor, a notable sale was that of a farm near Chelmsford, which sold to Middle East investors for ‘top dollar’ against strong competition from local farmers.
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