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Farming Talk - Tim Main

Land prices remain strong and stable; however two cyclic systems are bringing influence to bear.

Namely, commodity prices which have generally steadied farm incomes over the past two years, despite increases in yields in the cereals sector. Secondly the quietly returning strength of the UK economy and with it the talk of interest rate rises. Combined, these two factors are now taking the froth off land market prices.

Farmers are used to the cyclic nature of their incomes and most businesses are able to weather these vagaries, therefore when the opportunity to expand the business with land in the right location arises, it is usually too good an opportunity to miss and therefore strong prices are still being achieved.

The third factor is supply and demand; Shropshire is experiencing limited supply this year, after a very minor surge in supply last year. As a result of all these considerations, land prices are generally remaining strong.

That said one agent just outside the county recently reported sales of two blocks of land, one either side of the road – quality was on a par. Two parties wanted the same side, but interest was limited on the other side, the outcome was offers of £4,000 per acre difference!

For those considering a sale, it would seem that now could well be a good time, while supply remains so limited, interest rates are not intimidating and the contra nature of the UK economy vis land values has not yet turned.

Another example of the location factor was recently highlighted when a farm we are bringing to market next month (Sept) near Bishop’s Castle, has already achieved a sale of off lying land sold to a keen buyer while preparing the farm for market. Location remains a strong factor.

Development Land

Despite local and regional developers doubling the number of houses they are building this year, compared to 2014, there remains more planning permissions granted than can be absorbed. This is due to councils seeking to meet five year supply targets. Nevertheless the second term of Conservative dominance has given the economic stability these house builders need.

Individual plots in village locations remain popular; not least boosted by the fact that private individuals can register to be zero rated for CIL payment, offering a significant saving on building the dream home, for example on the average four bedroom house, at £80 per square metre, CIL would be in the region of £16,000.

There is no doubt house building is currently being a given strong greenlight, this will not always be the case. Tim Main is Head of sales at Balfours Property Professionals.

Lawley Telford resized2

Pictured:  Land on the market with outline planning permission for a luxury four bedroom house and adjacent two paddock, at Lawley, Telford; guide price £260,000.

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Tim Main - Head of Property Sales

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