Struggling to sell farmland? Here’s why
Economic uncertainty is driving a making it harder to sell farmland, according to rural agents. In England, during the first six months of the year, the amount of farmland which came on the market was the lowest for five years and the supply was below average in East Anglia. At the end of June, there were 74,000 acres publicly marketed across Great Britain, almost the lowest figure since records began in 1995. The lowest was in 2001 when the foot and mouth crisis locked up farmland.
This fall is fitting with wider purchasing trends across the UK. As Brexit uncertainty grips the nation, people are holding off when making large purchases and decisions until we know more about how Brexit will impact the property market in October. This August, Savills claimed people bought fewer homes in the UK in the first half of 2019 than at any point since 2009. However, Brexit isn’t the only factor discouraging sales. The price of farmland is increasing.
The cost of farmland
The average price of bare agricultural land in England and Wales has risen from £6,979 per acre to £7,030 per acre in the first quarter of 2019. Despite this, since 2015, agricultural land prices have fallen. They dropped by 14% since 2015, but with the recent increases, the drop in price over the past twelve months has lowered to 2%. However, agricultural land is still almost 50% higher than it was a decade ago, making it a hefty investment for most, even putting some off the idea.
Land and property buyers might avoid farmland when they feel the information about the land is vague and they have a lot of concerns about the buying process. The most important thing land agents and sellers can do is ensure everything your potential buyers need to know is documented and presented clearly. An associate at H&H Land and Property claimed in one case, a misplaced FENSA certificate for the farmhouse windows nearly destroyed the whole deal.
It’s important to get this information correct the first time, as when a property is re-listed consistently, you may struggle to regain interest from other, now sceptical, buyers. Sometimes, highly specific and restrictive permissions could be unhelpful in a sale, however, there are things you can change on farmland, including:
- Access routes
- Rights of way
- Reserved access
- Overage clauses
- Fixed equipment
- Water supplies
Things you might not be able to change include:
- Third-party rights
- Environmental controls
It’s important agents make sellers aware of these restrictions and opportunities to place their agricultural land in the best position for a sale in a stalling market. This will increase your chances of a first-time sale, making the whole process much easier, and maintaining consumer confidence in your abilities as an agent.
Agent Hub has created unique software which can connect commercial and land agents to thousands of other property professionals, helping you collaborate, get referrals, and manage your clients all in one simple application. As some areas of the market struggle, you can use Agent Hub to open the doors to new leads and business opportunities with Hub Chat, and by running your own marketing campaigns in-app. To try the UK’s first CRM built only for the property industry, visit our website today.