THOUGH less amount of land coming to the market in 2012 and 2013, Stags Farm Agency continue to report strong interest from buyers looking for land where there are commercial opportunities and have concluded a number of successful sales in 2013.
So firstly what is happening with land values?
Up until 2007 land values remained fairly constant with minimal change, then in 2007 and 2008 there was substantial growth with the national average rising from £3,500 per acre to £5,000 per acre (Source RICS/RAC Rural Land Market Survey H2 2012).
Since then we have seen a continued growth each year of around 5% to 10% with the National bareland average now reaching £6,783 per acre (source RICS/RAC Rural Land Market Survey H2 2012).
These are of course average figures from sales around Great Britain, so what we are seeing on the ground can be quite different depending location and land type.
In the South West we have been seeing greater disparity between the value of good arable land and average pasture.
In 2013 Stags land sales have achieved in excess of £10,000 per acre for quality arable land, while average pasture has been trading some way below this level.
As well as disparity in land type, we have also seen greater disparity in values depending on location. Land close to large urban conurbations such as Exeter, Newton Abbot and Plymouth where there has been an influx money from land sold for development or acquired for energy uses, has seen very strong localised market with buyers competing for land within a specific location and driving land prices up.
Looking across the South Devon, there are further localised markets these can include quality grassland close to the Moors attracting a premium from farmers on and off the Moors seeking accommodation land, on the coastline land always attracts a premium for its views and scarcity.
Demand for land is not only from farmers, we still continue to see demand for land on the edge of villages and towns from equestrian, amenity and investor buyers. Already in 2013 Stags have recorded land sales ranging from anywhere from £5,000 per acre to £12,000.
These figures quoted above must be read with some caution, as prices are very location and land type specific. Therefore it's becoming more important to have a good understanding of the local land market in each particular area to ensure the correct advice is provided.
The reason for purchase of bare land is for a number of reasons, for farmers the main driver for purchases is for expansion, but for people outside agriculture a purchase of land has been seen as a safe investment particularly with low interest rates more investors have come to the market as land performance has outperformed savings and been a safe haven during difficult times.
For a number of buyers purchasing land has been for tax purposes as it provides an opportunity to roll over gains and make use of Agricultural Property Relief for Inheritance Tax.
Going forward we predict there will continued strong demand for all types of land across the South West from buyers inside and outside agriculture. Therefore, good advice must be taken from an agent who has a good understanding of the local land market.
Coming to the market, Stags are launching a 35 acres block of productive arable land at Staverton near Totnes for sale by auction on October 1, pictured above.
George Alder from Stags says: "this is a quality block of arable land and will attract strong interest from farmers and investors," for further information please contact Totnes office on 01803 865454.