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RuralScene Issue 6 : ARTICLE 5

Property Auction Provides Some Market Pointers

By Simon Gooderham MRICS FAAV

Cheffins Land and Property Auctions in 2010 have contained the usual ‘eclectic’ mix of properties ranging from houses for renovation through to Northamptonshire pubs, reports Simon Gooderham MRICS FAAV. Of particular interest to our more rural-based clients was the sale of several parcels of land and rural properties which have provided an interesting indicator into current market conditions, and how buyers are currently viewing the market.

Earlier in the year, several smaller parcels of land were offered, ranging from Grade 1 black fen to permanent pasture. Sale prices ranged from £4500/acre to just under £9000/acre depending on location. Local competition dictated the price and demonstrated the large differences in values that have been achieved throughout the year. With strong local interest, sale prices exceeded guide prices by up to 50%. A number of parcels of orchard land have also been sold under the hammer, averaging around £5500/acre.

Another property which exceeded all expectations was on the Land Settlement site just south of Cambridge. A two bed house requiring modernisation, with outbuildings and 9 acres of paddocks attracted a lot of interest and sold for £550,000 against a pre-auction guide of £300,000 - £350,000.

As the year progressed demand for land continued to strengthen. A single parcel of 28 acres of Grade 2 arable land (with some redundant ex-WD buildings on site) at Bourn, 7 miles west of Cambridge, was entered into the auction with a pre-auction guide price of £150,000 - £175,000 with an overage clause. The land immediately generated considerable enquiries with over 20 parties registering an interest, and with strong bidding at the auction the land sold for £254,000 (approx. £9,000/acre) to a local farmer.

A further parcel of land, approx. 5 acres, with strategic development potential located on the outskirts of Soham, near Ely, also with an overage clause, sold for £110,000 (£22,000/acre) to an investment company. On the outskirts of Balsham village, a 4 acre paddock sold for £52,000 (£10,800/acre).

In the September auction, the sale of Hempsalls Farmhouse at Willingham, Cambs. gave a good indicator of the market value of houses with agricultural occupancy conditions (AOC) which are not being offered for sale as part of a larger farm. The property was in need of renovation and had some structural problems but sold with 6 acres of land for £134,000. The property generated significant pre-auction interest with over 29 registered parties but come auction day it became clear that only a handful were in a position to satisfy the AOC. Despite the condition of the property, the sale price realistically reflected a discount of 25% - 30% due to the occupancy restriction.

Overall, the auctions totalled sales in excess of £9 million, with around 70% of the lots on offer being sold at or shortly after the auction. The sale results provide an interesting market indicator particularly for land, and demonstrate the continuing strength of the land market.

We predict that there will continue to be a shortage of land coming to the market in 2011 and with demand remaining strong, prices will continue to increase. As always, location is a critical value and these results demonstrate the importance of ensuring that land is properly exposed to the market to achieve best results.

For further information on Cheffins Property Auction contact us on 01223 213777.