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RuralScene Issue 6 : ARTICLE 1

Strong Demand in the East

By Edwin Lee FRICS FAAV

The demand for agricultural land remains strong and the price has continued to steadily rise. The demand is due to a number of factors not least a shortage of supply. Landowners are tending to retain their land and either to contract farm it or, alternatively, letting it, bearing in mind the Tax advantages with regard to Capital Gains Tax and Inheritance Tax, as well as alternative investment yields.

There is also greater media interest in agriculture and global food shortages, together with the relatively high price of cereals, which are a contributory factor to the increase in demand and price for land.

Evidence is now common place for the sale of land at £17,500 per hectare (£7,000 per acre), possibly more. The market, however, can be selective and professional advice with regard to the sale and purchase of land is probably more relevant now than at any time previously, bearing in mind that not all land available comes formally to the market and prices can vary enormously due to a number of factors.

The method of sale of land is also becoming more of an issue and in a number of instances particularly with smaller parcels of land public auction is favoured. Cheffins recently offered 11.5 hectares (28.46 acres) of Grade 2 arable land at Bourn, Cambridgeshire suitable for combinable crops only by public auction with a guide price of £150,000 to £175,000. There was considerable demand for the land, which was eventually sold under the hammer for £254,000.

Tender rents for Farm Business Tenancies are, again, strong with rents in excess of £500 per hectare (£200 per acre) being achieved for fenland and in the region of £300 per hectare (£120 per acre) for arable land suitable for combinable crops and in some instances possibly more.

Land is being sold and let without, as such, coming to the market.

If you would like to discuss the sale and/or availability of land further, contact either Edwin Lee 01353 654910 or, alternatively, Michael Hamilton 01223 291957.