Farming Comment: Christopher Clarke reflects on trends in the agricultural land market
- Credit: Archant
When I began my professional career in the 1970s we sold a farm near Framlingham of 500 acres with land and buildings for around £500 per acre.
Today, good quality land in the area (without the house or buildings) is making in the region of £10,000 per acre and greater prices than this have been achieved.
I am asked every week where I predict the land market will go. The answer to that is that I never predict ? the market is sufficiently variable at present to find it difficult to value anything without pretending I have crystal ball!
I am aware that much larger agents put their necks on the block by making predictions ? I even saw one prediction for house prices through to 2017 the other day which I found quite extraordinary ? but Clarke & Simpson is not in that game.
We are happy to help clients achieve the best price possible at any particular time but to pretend that we (or anybody else) might know what is going to happen to the market in the future is, in my opinion, foolhardy indeed. If I had been able to predict this over the last 40 years then I probably would not have had the need to continue working as an agent.
What I do know is that there is very great demand for and confidence in land currently. Part of this is being driven, of course, by money from outside agriculture because it is a commodity that you can actually walk upon and see and there are very considerable tax advantages in owning land.
In addition, there are many farmers who have owned land for generations and accordingly when an adjoining area comes for sale it is quite different for them than another block say five miles down the road. So we have commercial considerations, taxation considerations and emotional considerations to think about in trying to assess land values at any one time.
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It must not be forgotten, however, that good quality land in Suffolk was around £2,000 in 1982 and that 10 years later it was closer to £1,000 per acre. Will this happen again? Who knows? I am certainly not predicting, but the old adage that nothing goes up forever should never be forgotten and perhaps anybody considering a sale should be aware that today’s prices are probably the highest that have ever been seen.
It is a clever person indeed who hits the very top of the market so is this the moment to sell rather than hoping for better things in the next few years?
: : Christopher Clarke is founding partner at Framlingham-based Clarke & Simpson.