Although 2020 has been a very difficult year for many, the market for land and farms across the Yorkshire region has continued to see strong prices and continued high levels of demand.
The area of land offered for sale across the region has remained at near record low levels which has helped to hold prices firm as demand out-strips supply. In spite of this, a number of commercial farms were put to the market in late summer, each receiving a good level of interest and being sold by the year end. Sale prices have risen across the region with a slight rise in prices for good quality commercial blocks or arable land often in the region of £9,000 – £12,000/acre. Blocks of pasture land continue to trade at a discount but attract significant demand with prices ranging from £7,000 – £11,000/ac, smaller parcels in desirable locations with scope for amenity uses often achieve £15,000 – 20,000/ac.
Demand continues to be from a range of buyers including commercial farmers, private and institutional investors with a significant increase in amenity buyers and demand from buyers seeking environmental benefits. The latter have increased over recent years and now include small private companies seeking to offset their carbon, investors looking to restore vulnerable habitats and local wildlife trusts and groups seeking areas to plant native trees for conservation purposes. These groups will only become more numerous as we see an increased focus on climate change mitigation.
The outlook for 2021 remains strong with demand remaining constant as we enter the new year. The Agricultural Transition moving away from the Basic Payment Scheme will be one of the biggest changes to the Agricultural Industry in a generation and will force changes in land occupation and ownership, however, the supply of land to the market is unlikely to increase significantly for another 6-18 months leading to continued strong prices in the first half of 2021. Thereafter, if we see a significant increase in supply, prices could ease slightly however, this may be only a temporary position. Potential tax changes due to be announced in March 2021 could remove some of the advantages of land ownership such as the Capital Gains Tax rebasing upon death. Any tax changes could have large scale implications to the supply and demand for farmland, such changes seemed unlikely 12 months ago but as the financial impact of Covid-19 bites, the Chancellor will be under increasing pressure to balance the books.
For advice on Land and Farm Sales, please contact Andrew Hardcastle on 01423 860322.