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THE South West’s farmland market has been able to defy uncertainty surrounding the coronavirus pandemic and Brexit thus far, according to rural land agents in the region.
According to David Hebditch, a partner at Carter Jonas in Taunton, says when the crisis struck back in March, most farmers were “flat out” catching up from the wettest winter in history, and it was therefore very much “business as usual”.
But he adds that coupled with the political situation regarding Brexit, some farmland buyers and sellers have “probably held back a little in 2020, which would account for a drop in supply across the country”.
While 2021 holds a lot in store for British agriculture, Mr Hebditch says there is a good case for bringing farms to the market either now or in the spring.
He explained: “There are benefits for buyers and sellers to moving early, not least the relatively benign tax regime currently in place which could change when we see what is in the delayed Budget.”
And while rates are low and the banks are very competitive, now is a good time to be borrowing money,
Mr Hebditch continued. “Overdraft limits and arrangement fees are being looked at and we’ve never been busier with our Agricultural Mortgage Corporation (AMC) work within the South West.
“As we move forwards we could see some hardening of rates because money is very cheap right now.”
Rollover buyers are prominent in the region, he added, contributing to the number of people actively searching for opportunities. “These individuals are generally looking for reasonable acreages and quality ground,” Mr Hebditch said.
Well-equipped dairies and units with existing income streams from diversifications are proving popular with buyers.
“If holdings have an established income that sits alongside the farming enterprise it means the buyer doesn’t need to go through the planning and conversion, and pay all the costs,” Mr Hebditch explained. “I anticipate that will continue to be a trend going forwards.
“There is also an opportunity for buyers to divide their farm to suit different markets. A house with paddocks can be packaged together for the strong lifestyle market, and farmers are more than happy to pick up the land - they don’t always want or need another dwelling.”
Although demand outstrips supply, Mr Hebditch warns that being realistic with valuations is very important.
He concluded: “You rarely get away with over-valuing a farm. However, if you price it right the market will pick it up and potentially run away with it - you may well beat the guide price that way.”
Farms sold recently by Carter Jonas include Carwen Farm, near Looe in Cornwall. With 261 acres, it sold in November off a guide price of £4 million. Tucks Farm, in Charlcutt in Wiltshire, sold in September in excess of the guide price after a best offers process.