Increasing polarisation in West Midlands land market

Agents operating across the West Midlands have painted a mixed picture of the land market.

Size and quality continue to play leading roles in buyer decisions across the region.

There is a big variation in demand and price, with small farms proving difficult to sell, while the number of large commercial units entering the market is failing to satisfy demand.

Opportunities to rent remain few and far between, while big housing developments and major infrastructure is starting to affect the market.    

Charlotte Rogerson, chartered surveyor at Berrys, Shrewsbury

The market is becoming more polarised. 

There is either incredible demand for land resulting in very strong prices, or little demand with clients adopting lower price expectations.  

Versatile, bare land in the right location that complements a thriving, existing business has been selling very well.

The interest for whole farms is extraordinary but the requirements of those purchasers are for a well-equipped farm suitable for modern machinery and which is easily managed.

See also: Diversity drives demand for East Anglian farmland

The right farmer with ability to access funds is still very much an active purchaser, along with lifestyle purchasers in the right area and indeed investors.

I would not suggest that there has been a significant amount of land brought to market due to low farmgate prices.

Land for rent rarely comes to the open market and prospective tenants will need to keep their ears close to the ground to grab any opportunities.

I don’t think we will see significant changes to the Shropshire market in 2017.

Nationally, the picture is painted differently and average figures are distorted with land at both ends of the spectrum not providing a true reflection of what is happening on the ground.

Liza Randall, rural surveyor at Godfrey Payton, Warwick

We have significant interest from purchasers who have sold development land around Warwick, Stratford and Coventry who have rollover money that they are seeking to reinvest in farmland.

Whole farms are in demand and investment opportunities are like hen’s teeth.

We have clients on the books actively seeking large arable farms or small estates, but are finding those subject to lifetime tenancies are commanding a premium as they represent a secure investment.

See also: East Midlands let land demand strong, but prices high

Smaller areas of bare land which would normally be snapped up by farmers have been more difficult to sell as a result of depressed income streams.

Farmers are the least active, followed by lifestyle buyers who are not as prominent as they once were. Charities and institutional buyers are investing and are one of our most active markets.

We are seeing HS2 looming – those who face compulsory purchase are then driving the market to buy unaffected farms.

We see that larger tracts of farmland coming up to rent, particularly those following a lifetime tenancy, are in strong demand.

Generally rents are competitive, with a premium for maize land within striking distance of a plant, but overall they have steadied.

David Giles, director at Halls, Shrewsbury

The market has been resilient, but not plain sailing across the board.

Previously we could literally sell anything, but smaller farms have become more difficult to budge. 

Buyers have tried to be more cautious, but due to the strength of the market, they have really had to get stuck in to compete.

Farmers are the most active buyers.

We don’t see many lifestyle investors due to the lower return on farmland investments.

See also: Farmland buyers: Who are they and what do they look for?

We all expected more property to come onto the market this year with farmers squeezed by poor commodity prices.

But some have recovered while others are in the process of recovery. We have had fewer farms to sell this year and could do with more to satisfy demand.

There are not enough opportunities in the tenanted sector. Rents have dropped because they went too high, but they are still fairly high.

The best land is still renting well and opportunities are limited.

I predict that land prices will stay at current levels or improve during 2017.

The EU referendum result has had a positive impact because it has helped improve commodity prices and farm returns, which underpin the land price.

Coughton Fields Farm

Godfrey-Payton sold the unit near Alcester, Warwickshire, in January to a neighbouring land owner.

It had a range of traditional and modern farm buildings together with 484 acres and sold well in excess of the £5m guide price.

Webscott Farm

Near Myddle, Shropshire, the farm was marketed by Berrys in the spring at a guide price of £3.5m.

The sale included 218 acres of grassland, a herringbone parlour, dairy and youngstock housing and two houses.

Sutton Hall Farm

With a guide price of £3.5-£4m, the sale included 205 acres of irrigated arable land, 300t of grain storage, a large farmhouse and let commercial buildings.

The farm, near Shifnal in Shropshire, sold to a farmer through Halls in May.