Spring Property Market Update
The first Stafford office rural property auction for 2006 started with the sale of Red Brae Farm, a 156 acre grassland farm close to Lichfield. At a time when the national farmland market has more purchasers than vendors the farm generated a huge amount of interest from local farmers, those with equestrian interests and also investors looking to increase strategic land portfolios. The four Lots sold well, each exceeding, or achieving a price equal to, the upper guide. Bare pastureland of 41.81 acres and 68.92 acres sold for £4,066/acre and £3,294/acre respectively suggesting that the West Midlands land market is perhaps performing better than other regions, or just simply reflecting the restricted supply. The 11.31 acre paddock made £6,631/acre, whilst the most popular Lot (comprising a 2 bedroom bungalow with agricultural occupancy condition, farm buildings and about 33 acres of pastureland) sold for £380,000.
One of the major advantages for farmers is the value of the Single Payment Entitlements that the land attracted. Based on the 2005 payment (which had been paid to the vendor!), the SP produced about £72/acre, which could go a good way towards servicing any borrowings for the land purchase.
On the market outlook generally, Gordon Brown's 2006 Budget has not assisted a land market recovery. In fact, the rather unexpected Inheritance Tax proposals to tax Interest in Possession Trusts and Accumulation and Maintenance Trusts could have an adverse affect, particularly on larger Estates. Gifts to these Trusts are not likely to be seen as Potentially Exempt Transfers, therefore attracting a tax charge over the IHT threshold (£285,000 with effect from 6th April 2006). There were no great surprises however for Stamp Duty Land Tax, with the token gesture of increasing the lower rate threshold by £5,000 with 1% Stamp Duty now payable on residential purchases between £125,001 and £250,000. This is hardly likely to improve affordability for newcomers to the residential market.
James Pegrum of Fisher German’s Stafford Office points out, “Nationally, this April house prices have risen for the fifth consecutive month, and more people are enquiring about purchases for a record-breaking 10th month in a row, according to the latest RICS UK housing market survey. One has to feel positive about a strong post-Easter rally, with price expectations at their highest since April 2004”.
- Ashby de la Zouch
- 01530 412821
- Banbury
- 01295 271 555
- Knutsford
- 01565 757970
- Market Harborough
- 01858 410 200
- Newark
- 01949 851815
- Southampton
- 02380 883150
- St Helens
- 01744 451145
- Stafford
- 01785 220 044
- Worcester
- 01905 453275
