Property & Business - Winter 2020

Future farm profitability looks uncertain, with expected subsidy reductions and the potential for tariffs, if a trade deal with the EU is not agreed. Farmland, like gold, is seen as a safe haven and a potential hedge against inflation. Many farmland purchases have been funded by the re-investment of gains from the sale of development land. This market stalled during lockdown, but is now recovering due to a buoyant housing market. Some have seen other business interests adversely affected by the virus and this can divert attention and capital, taking the focus away from expanding the farm operation. The appetite of some has been affected by the bad weather and a poor harvest, which has reduced farm income for many farmers in 2020. Farms with good residential appeal have attracted extra interest as buyers, liberated by home working, look to move from the city to enjoy the space and safety of the rural idyll. In summary, there is little land on the market and although there are significant variations, generally the farmland market has proved resilient during a very turbulent period.” Ian Walter comments, “The farmland market in the East Midlands has experienced a roller coaster ride during this year. Activity has been stifled by Coronavirus. The uncertainties of Brexit and a rotten harvest have further dampened enthusiasm, but farmland remains in tight supply and less land is changing hands year on year as it is concentrated in fewer hands. Investors with funds created by farming activity are still out there, in some cases trying to gauge the bottom of the cycle. A new farming year brings renewed hope and enthusiasm. With so many home owners wanting to live in the countryside, we expect to see renewed enthusiasm for investment in farmland. We have the best of it in Lincolnshire and Nottinghamshire and they are not making any more of it.” 02 PROPERTY | BUSINESS | PLANNING | ENERGY Farmland Market Tim Atkinson commented, “The background to 2020 farmland sales is complicated by all the economic and social concerns around the Coronavirus pandemic, added to the industry specific concerns about a trade deal with the European Union, the future direction for farming policy and subsidy changes. This makes it more difficult to predict the likely result when a farm is offered for sale. There are few farms on the market. We have seen a widening range for land values with good land in the right location making a strong price and remote, poor land struggling. So what are some of the factors, which are a consideration to players in the market? Interest rates are low, which encourages those with cash to invest and reduces cost to those who need to borrow, if the loan is actually available. Ian Walter BSc (Hons) CEnv FRICS FAAV Senior Partner, Chartered Surveyor e t 01522 504333