Rural land prices remain positive
The UK’s rural land market has remained positive in 2016, according to Carter Jonas.
Since 2010, average land values have been rising at a steady rate but saw a modest decline in 2016, which the estate agent attributes to an organic market correction rather than being a direct result of the decision to leave the EU. Apparently, deals that were under negotiation prior to the vote remained unaffected.
Cater Jonas comments: “A shift in the commodity market following the referendum vote has re-energised and strengthened sentiment in the rural sector. In July 2016, fertiliser prices reached their lowest point since 2009, at £169.50 per tonne, before rebounding modestly in September. Conversely, outputs such as feed wheat and rapeseed oil have seen increases of up to 15% in the last quarter alone and this highlights the investment benefits of the UK’s farmland in the face of an uncertain economic landscape.”
The report also highlights:
- On a national level, smaller blocks of land remain in high demand, achieving in excess of their guide prices. However, larger acreages have also generated significant interest this year, driven in no small part by local farmers within the Central and Eastern regions.
- With the UK expected to trigger Article 50 by the end of March 2017, the fact that land values have, on the whole, been unaffected since the result to leave was announced is encouraging. With certain hotspots actually witnessing an increase of circa 2%, the sector as a whole is set for a positive outlook right through to the end of the year and into 2017.
- In addition, there is evidence to suggest that funding is taking longer to authorise as was initially feared, but the main banks nonetheless remain committed and content with the future direction of land values.