Farmland prices remain as high as ever, with farmers returning to bolster competition in the market place, reports Anthony Mayell, a partner of Fisher German, one of the top four independent rural surveying firms in the UK. Despite recent interest rate rises the demand for mainly residential farms also remains surprisingly buoyant despite non-farmer and lifestyle buyers falling to just over 40% of the market, from a peak of 51% in mid 2004. | 
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Lifestyle buyers nevertheless continue to be an influential force with farmland in such short supply. As a consequence farmland prices in 2004 rose by 25%, compared to just 7% in 2003 – the largest increase since 1994, whilst the number of sales has fallen by 43% in 2 years.  | Buyers now appreciate the true value of a farmhouse with land - the type of family home much undervalued in years gone by. With country property also come fringe benefits such as the opportunity to set up businesses or work from home, diversify traditional buildings as an additional income stream, fulfil a farming or equestrian hobby, or realise conservation ambitions with woodland and water. |
Anthony Mayell continued “ As a firm with strong Midlands connections, acting for clients throughout the UK, we detect a huge reservoir of wealth searching out farms and rural estates in the West Midlands, and south and west of England. The firm has held another round of successful auctions over the past couple of weeks selling properties in Gloucestershire, Warwickshire and Northamptonshire. The sales included an 87 acre (35 Hectare) organic stock farm near Daventry, Northamptonshire, which realised £886,000, well in excess of the guide price. | |
Privately a 280 acre (114 Hectare) Northamptonshire arable holding is under offer at well above the £745,000 guide price. What is apparent from the number of unsuccessful bidders is how much further afield Midlands based buyers will now look, extending their search into the south and west of England.” For private buyers inheritance tax considerations and the opportunities to off-set borrowings tax efficiently against the commercial parts of a property investment, are key ingredients in their purchasing strategy. As Anthony Mayell pointed out fresh injections of capital in the countryside can also open up new opportunities for the locally based rural economy. However, prospects for 2005 now seem to favour large commercial farms where interest is building from well established farmers encouraged by the prospect of more stable farming incomes, and greater certainty introduced through recent subsidy reforms. |  |
Colehurst Manor near Market Drayton, Shropshire, a 175 Hectare (432 acre) Grade 2 and 3 arable farm, available as a whole or in up to 8 lots at a guide price of £2m, is already stimulating widespread interest. The signs are that the farmland market will become busier during 2005, with historically high prices maintained as farmers return to compete with lifestyle buyers.
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