Surge in farmland sales continues
Flying in the face of the turmoil in world economies the UK farmland market surged again in the second half of 2007, with prices rising 27.9% compared to 22.6% in the first half year.
Arable land in the West Midlands in particular reflects this trend with average prices reported to have risen almost 50% in the past 12 months to £5,200 per acre. Pasture and dairy land follows close behind with prices up to £4,600 per acre.
Anthony Mayell of Fisher German LLP, specialist rural surveyors handling land sales throughout the region commented “We have recently agreed the sale of almost 100 acres of land in Shropshire averaging £8,200 per acre, and there are numerous examples locally of commercial farmland realising £6,500 to £7,000 per acre, with smaller blocks of farmland up to £10,000 per acre.”
As interest from lifestyle buyers subsides, making up 35% of farmland purchasers in 2007 as against 45% three years ago, so the number of farmers buying land has risen for the fourth year running. Over 75% of farmers expanded their rural businesses in 2007 with almost 10% relocating to pastures new.
With forecasts predicting a growing world demand for food and energy, as world stocks diminish commodity prices are expected to maintain their upward trend and that can only encourage farmers to expand production. With more entering the market for farmland, demand will continue to outstrip supply.
Raising finance to buy land and rural businesses is also a world apart from the cut throat commercial lending sector. The main clearing banks and specialist lenders such as the Agricultural Mortgage Corporation (AMC) have teams dedicated to agricultural lending in a highly competitive market.
Anthony Mayell added “With close links to the bank's agricultural teams, and working as AMC Agents, we see just how flexible lending to rural business has become at surprisingly attractive rates of interest in times of credit crunch. Applications range widely from finance for land and property purchases and restructuring existing borrowings to working capital and large farm diversification schemes.”
Rural business loans, whilst secured primarily against rural property, can also now depend on other residential and commercial property interests, with applicants servicing their repayments through businesses quite distinct from farming.
Anthony Mayell highlighted recent loans for livery businesses - farmshops and cheesemaking, garden centres and horticulture, and large on-farm residential and business developments as examples of the scope of finance available to rural businesses.
He concluded by emphasising “As a firm we offer a direct link between the applicant and lender providing farm management advice, business appraisals, and valuations, all of which form the essential ingredients of a well presented application. In UK lending to agriculture the keystone is the high standard of customer care and support offered by lenders throughout the life of the loan.”
For further information, please contact Anthony Mayell or Richard Hutcheon on 01905 453275.
- Ashby de la Zouch
- 01530 412821
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- 01295 271 555
- Knutsford
- 01565 757970
- Market Harborough
- 01858 410 200
- Newark
- 01949 851815
- Southampton
- 02380 883150
- Stafford
- 01785 220 044
- Worcester
- 01905 453275
