East Anglia’s farmland prices are a ‘postcode lottery’ say property agents
PUBLISHED: 15:28 18 April 2018 | UPDATED: 15:28 18 April 2018
East Anglia’s farmland market has become polarised into a “postcode lottery”, with variable prices dictated by a raft of location and lifestyle factors.
That was one of the insights from rural property agents speaking at Strutt and Parker’s land and property briefing, at the John Innes Centre on the Norwich Research Park.
Director Tom Goodley said although the average price paid for arable land in the East of England last year was £9,300 per acre, there were wide variations between the highest and lowest values.
He gave recent examples of the two “extremes” in the market – a productive Grade 2 Fenland farm with low amenity value which was marketed at £6,500 per acre, and a plot of Grade 3 non-irrigated land in north Norfolk which made £10,750 per acre.
“If you want to make money, you would make more out of the first one,” he said. “So why is it less valuable? The answer is that in north Norfolk there are other reasons for buying land, while the Fenland farm has no amenity value – it is not somewhere you would necessarily want to enjoy from a walking or shooting point of view.
“It is quite difficult to analyse the profile of the buyers – they could be farmers, investors or lifestyle buyers. From the taxman’s point of view, they have to be farmers, but understanding the crossover is key in trying to understand who the buyers are. The majority of farmers have other business interests and will have other reasons for wanting to buy a farm.
“The price is a postcode lottery. The land market has never been more polarised. There are pockets of strength, but some poor results as well.
“I think that polarisation will continue and, if anything, the gap will get bigger.”
Other topics covered at the meeting included a general farming update from senior associate director Jason Cantrill.
He said the signals from Defra secretary Michael Gove suggested that the environment is “very high on the agenda” for the government’s post-Brexit plans, so farmers needed to be ready to adapt to new policies which will reward the provision of “public goods”, rather than subsidies based on land ownership.
“As an industry we are going to have to adapt and change and evolve as we go,” he said. “We have been given some certainty from Michael Gove in the short term, but what the future looks like in the longer term is still unknown”.
Fellow director Russell de Beer explained his views on land management, including giving examples of barn conversions to generate new non-farming income streams for rural businesses – something which he said will become increasingly important in the post-EU era.
“Once upon a time, rural diversification was something different and exciting, but not now,” he said. “The need for property owners to diversify is now essential. We know that with the reduction in subsidies, farm incomes are going to reduce, so farmers and landowners need to concentrate on rural diversification opportunities.
“It is not as privilege any more. It is a must.”