As the hail stones beat against the window, one has to wonder how long it will be before things start to dry up.

There are a number of farmland / farm vendors, who are keen to launch properties onto the market, but recognise that with only one chance to create a good first impression, now is not the time. For this reason, there is very little agricultural property on the market and few buyers looking.

Last week, the RICS published their Rural Land Market Survey for 2017. According to transactional evidence, the market perked up slightly in the 2nd half of 2017, although the average price of £10,260 per acre is still 2% lower than 12 months ago. Meanwhile, the opinion based measure slipped further (1.4% during the 2nd half of 2017), leaving it down nearly 8% year on year.

Here in the South West, Stags have not experienced an 8% fall in farmland values. In some cases, land values have not dropped at all and in other less popular locations (sometimes very close to popular areas); land is very difficult to sell without a dramatic price reduction. In West Devon and Cornwall average Stags’ sale values push up 13% to £9,122 per acre. (This has probably been skewed by an increase in the proportion of smaller land deals).

Looking ahead, the opinion of most of the survey contributors is for prices to remain modestly negative with commercial blocks of farmland likely to fall more than residential farms. There appears to be a consensus of opinion that the political uncertainty associated with BREXIT is having an impact on demand, but more so on supply, leading to predictions that values will remain relatively unchanged. There remain a number of reasons stimulating demand, such as Roll-Over Relief, Inheritance Tax Relief, lifestyle reasons, investors looking for a safe haven, or those with perhaps a ‘once in a generation opportunity’ to buy land in a very convenient location.

Locally Stags are receiving good interest for smaller farms and land parcels, where the financial commitment is less. The larger, more expensive properties have been less popular. In the autumn we launched two farms of about 70 acres. Both had strong offers accepted within 4 weeks of coming to the market. However, many larger, more expensive farms, both on the market with Stags and other local Agents, remain unsold. Land quality remains important, but location probably more so.

Despite the tight supply of land, Stags achieved a 20% increase in the amount of acres sold in 2017 (over 4,000 acres). Interestingly, over 80% of the land and farm deals agreed along the Devon Borders and in Cornwall last year were at or above the guide price. Honest advice and realistic pricing is crucial. There appears to be a growing realisation that it will be some time before Brexit uncertainty is clarified, however there are compelling reasons why putting business decisions on hold is not acceptable for many farmers. Many appear to have a blind optimism that “everything will turn out alright” and are cautiously just carrying on. As uncertainty over agricultural policy is clarified, confidence and prices in the medium to long term, look likely to firm.

For a confidential chat about your requirements, whether buying or selling, please contact Andrew Ranson on 01822 612458.