Bare land block numbers stay high for second year

Sales of bare land blocks are at their second highest level in seven years.

Data from property and land adviser Savills show that in the first six months of 2024, there were 150 blocks larger than 50 acres publicly marketed in England, Scotland and Wales.

In the years since 2017, there was a higher number on the market at the same point only in 2023, with 152 blocks for sale at that time.

A significant volume of transactions are also said to be taking place off-market. Agents suggest that pressure on cashflow is a contributory factor.

See also: Advice on managing borrowings and their costs

Charlie Bryant, a partner at Brown & Co, says the combination of high tax bills after a good trading year for arable farms, followed by challenging crop establishment for this season, is a reason why landowners are selling off some acreage, mostly in off-lying blocks.

“Farmers are very conscious of the pressure on cashflow and in some instances are selling chunks of bare land to ease that pressure,” says Charlie.

“Some of our clients have had pretty hefty tax bills followed by terrible weather conditions for getting crops into the ground; significant areas have not been planted this year.”

Selling land is the only remaining option for some, he adds.

Borrowing not viable

“Historically, they might have borrowed more money to get them through a period like this, but with high interest rates it is not such a viable option,” Charlie says.

The transition from Basic Payment Scheme support combined with high agricultural inflation and interest rates have taken their toll, suggests Peter Mason, associate partner at Ceres Property.

“Cash is king, and debt has to be serviced or it will spiral out of control with interest rates where they are, and is part of the reason we are seeing more land coming to the market this year,” he says, adding that there is good demand for high quality well-drained land.

While some are giving up farming entirely or retiring, others are disposing of outlying blocks of land to raise capital to diversify or re-invest in other parts of the business.

Interest in bare blocks is coming from those with capital gains tax rollover funds, institutions and high-net worth individuals. However, commercial farmers continue to make up the bulk of buyers, he adds.

The firm launched a block of 77.5 acres at Darenth Hill, near Dartford, Kent, early this month, with a £1.05m guide price. Interest has come from a wide mix of buyers, says Peter.

The land is a mix of Grade 2 and 3 arable and has a general-purpose building.

A block of 77.5 acres at Darenth Hill, Dartford, Kent, was launched by Ceres Property earlier this month © Ceres Property

Wide price range

Bare blocks have changed hands at up to £20,000/acre in regions like the Midlands, where many farmers have benefited from development and income from non-agricultural sources and want to reinvest.

However, where those buyers are not in evidence, prices are much lower.

“We are seeing an ever-widening differential between sales to someone with development cash or income generated outside agriculture, and a commercial farmer who is reliant on borrowing the money,’’ says Charlie.

“The biggest demand for bare land continues to be neighbouring farmers although there is less cash available at this point in time.’’

Fear of tax changes in October, including to capital gains tax, is a reason why some farmers are bringing sales forward.

“Landowners are nervous of the Budget and some are getting on with things to get the sale done and dusted before then,’’ says Peter.

Savills has 103 acres on the market near St Davids, Pembrokeshire, at £927,000 © Savills

Nottinghamshire bare land

© Bare land at Blyth © Brown and Co

Brown & Co is about to launch two bare land fields near Blyth, Nottinghamshire.

In this case, the reason for sale is that the land is owned by three non-farming family members who want to rationalise their relatively small landholding.

The land has road frontage and is close to the A1. Totalling almost 19 acres, the Grade 3 land will be offered in two lots, with an overall guide price of £240,000. The soils are Newport 1 series.

Brown & Co has also recently launched almost 107 acres of bare land in four lots at Coveney, Cambridgeshire. This has an overall guide price of £1m, with the four lots ranging in size from 9 acres to 44 acres.