2017 starts strong
Uncertainty reigns in British land market
There is renewed interest in the British land market. Good news for sellers and brokers, who had a mediocre 2016 behind them. This is partly due to Brexit. It creates uncertainty in the market. However, the first quarter of 2017 ended on a positive note.
About 40 percent of the companies that came on the market in 2016 were not sold by the end of December. That is a considerably higher proportion than we are used to from the past.' That's what Michael Fiddes, head of real estate agency Strutt & Parker, says to website Farm UK† 'Sales have picked up again since Christmas. A quarter of all land that came on the market in the first quarter of 2017 has already been sold.'
40
procent
Buyers are waiting longer
"This signal is encouraging and suggests that buyers remain confident in buying farmland as a long-term investment," said Fiddes. 'It does take longer to finalize a sale. Buyers are cautious now that fewer privateers are active on the coast. According to our analysis, just over half of all livestock and residential farms that entered the market last year are still available or have been withdrawn from the market. That is a higher share than other types of companies.'
Huge spread
The average price of arable land at Strutt & Parker in the first quarter of this year was 28.500 euros per hectare. That is because the real estate agency has traded 3 transactions for 43.600 euros per hectare. According to Fiddes, it shows that land prices have an enormous bandwidth. You don't see that reflected in the averages. '40 percent of all arable land transactions are between 6.000 and 8.000 pounds per acre. The rest has been sold for more than £10.000.' According to the broker, such differences occur when a buyer is determined to get his hands on the land, regardless of the price.
Brexit fear
Despite more transactions in the first quarter, considerably less land was offered. The reasons for this lie in wait-and-see sellers and more supply at the end of 2016. The broker expects more supply in the coming months, although it is unlikely that sales this year will reach the level achieved in recent years. 'The prices will remain roughly the same, although that will be with a large bandwidth, depending on the location. It is becoming more difficult to sell companies and prices are slightly lower than the top level of 2015. The market is showing unruly, partly due to the uncertainties that are fueling the Brexit fear.'
Niels van der Boom
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