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How will land sales fare post-election

 

Over the past five years land has been used as a hedge against recession, setting the land market on a skyward trajectory. Meantime, in the past two years as the general economy is starting to generate cash, we have actually seen farm-gate commodity prices falling along with EU support. Put all these factors into the crystal ball and while land prices this year are positive, we are unlikely - in the term of this government - to see the significant land price rises witnessed in the past five years.

Rural
At Balfours we have successfully completed on a number of private farmland sales this year; one of the latest being 300 acres in the south of the county and with the election now out of the way, it is likely more purchasers will feel ready to progress their businesses.

Without doubt neighbours seeking expansion understand the once in a lifetime opportunity that purchasing neighbouring farmland presents. Private farmland sales ‘off the open market’ have proved particularly popular this year in Shropshire and bordering counties, with deals struck as neighbours look to retire or off-load, safe in the knowledge that adjacent farms are keen to upsize.

Outside mainstream farmland the “model paddock” remains a vendors market, with access, location, fencing and water being drivers. We have just launched a paddock of less than 2 acres to the market at Brockton; with a guide of £25,000 – interest has already been very encouraging.  It can be a positive way to generate investment capital, whilst offloading parcels which no longer fit with the farm’s business plan.

Development land
Despite local and regional developers doubling the number of houses they are building this year, compared to 2014, there remains more planning permission granted, as councils seek to meet five year supply targets, than can be absorbed. Now with the formation of a second term of Conservative government and the economic stability these house builders are hoping – that these positive signals continue.

There is currently a big gap between the national builders with developments of 75 homes plus and the local builder, who is often looking for ten to 20 homes. It would appear this is not helped by the fact that once outline permission is granted, ‘reserved matters’ are often required within twelve months, which in the current economic climate is a big ask.

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. 

 

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