Rural land and property update Winter 2022
The UK economy is in recession, so what does that mean for the longer term and for land and property values here in the South East?
Looking at bare land values first, it would be easy to reflect on the two previous UK recessions (2008 and 1990) which indicate that when there is a recession, bare farmland values tend to fall immediately after. However, what we must factor in now and for the future is that it is a very different market and in some locations, a number of competing buyers remain.
Across the South East, we have interest from housebuilders, amenity buyers, investors, vineyards, and farmers, so which way overall values will go isn’t an easy prediction to make and of course every sale is different.
There is currently demand from investors looking for significant land parcels for carbon offsetting projects such as new woodland creation and land with biodiversity net gain opportunities. We have recently closed a deal for the sale of a 90+ acre parcel of bare land between Hawkhurst and Sandhurst which is to be planted with a new woodland, providing revenue opportunities from carbon offsetting.
Further over into East Sussex we recently sold to an amenity buyer who took advantage of an 80+ acre parcel of neighbouring farmland, matching house with landholding, to create a mini estate, securing the spectacular rural views they enjoyed from their home, but also creating future new income opportunities.
Thankfully, following the autumn statement, Agricultural Property Relief and Business Property Relief remain unchanged which could have led some land owners to re-evaluate their options.
Land prices therefore remain strong, even as we enter the winter months but expect to be challenged on price. Sellers do need to be realistic about the location of land and the impact this will have on land value for the next couple of years. We also expect those needing finance to complete deals will be cautious due to the uncertainty around interest rates, possibly waiting until next spring to make a move, aware that lenders are stress testing agricultural borrowing to in some cases 8%.
Looking to the wider rural residential property market and the demand for smaller development sites remains strong despite recent economic events and many smaller housebuilders are looking for well-located and priced sites that will see them through the next couple of years. It is always worth considering the potential for redundant buildings or parcels of land and we are happy to advise.
Demand also remains high for individual rural residential renovation projects, especially those with some land and we have sold several sites for well in excess of the guide price this year with multiple bidders. Small farms including several with an Agricultural Occupancy Clause have also sold well this year.
We are acting for several land and property owners who will be impacted by the Lower Thames Crossing including compulsory purchases. More widely across the North Kent area we have sold some substantial and historic residential properties for well in excess of the guide price, in one instance around 40% more. Buyers are valuing the proximity to central London, value for money and rural lifestyle of some of the outlying villages which have previously been over-looked.
Whilst we expect a ‘buyer’s market’ over the coming months, sellers should remember that a successful sale depend on getting the guide price right for that moment in time. And buyers should note that often many rural homes only come up for sale once in a generation, with many staying in the same family ownership for many years. It is therefore important to be in the best position ie chain free to buy and to act quickly and decisively to secure your dream home.
Remember that life always moves on, people always need to buy and sell houses, but both however need time and patience. Conveyancing is taking many weeks longer than you may have previously experienced and there are still long delays in dealing with the Land Registry, for local authority searches and even for property valuations and surveys.
We are here to offer advice and support for your next move.
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