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I am delighted to report that 2015 was a record year for the sale of land and farms throughout Cornwall and along the Devon Cornwall borders for Stags. This year we have seen the number of agreed sales for farms increase by 20% and the number of land deals have more than doubled. We put this down mainly, to an increase in market share, rather than an increase in the supply across the region. Interestingly we and other local agents do not appear to being valuing any more land or farms than would be expected at this time of year, unlike the slight increase in supply seen nationally.
There was a buoyant market for both farms and land in 2015 across Cornwall and into Devon. In some people’s opinion, considering the current poor farm incomes, prices have been defying gravity. We have sold all except one farm that we have been marketing this year, and this is likely to return to the market in 2016, after some planning matters have been resolved. Perhaps surprisingly although we have seen various blocks of land sold to reduce borrowings we have not seen any farms come to the market due to debt. We have however sold farms due to retirement, downsizing, divorce and death.
Demand has come in most cases from purchasers who are not “proper farmers”. Particularly in Cornwall we often see a number of more residential farms come to the market. Regularly these have about 40 or 50 acres of land and in many cases appeal more to an out of county “lifestyle buyer” looking to move to this area. After rising property values in the South East, this market remains relatively strong and is less impacted by lower farm incomes. Two examples of this are East Rightadown Farm, a 50 acre farm near Holsworthy that has been sold in lots, with the main element going to a purchaser from Essex. We have also sold a 70 acre farm between Newquay and Bodmin to residential purchasers from Wiltshire. This is one reason why Stags have invested heavily in our website, leading to it being the most searched property website in the South West.
Of the many blocks of land sold in this region in 2015 the majority of purchasers were non farmers. These have tended to be for the more amenity size parcels of land, with expanding farmers, more than investors still being the main purchasers for the larger blocks of land. A couple of examples of this are 40 acres of marginal land near Daivdstow which sold for £100,000 more than its guide at auction, to a neighbour, making £8,000 per acre. 120 acres was sold on the Devon Cornwall border for a little less than its £7,200 guide to a local farmer expanding/setting up a son. Throughout 2015 we have also sold a large range of land and some woodland. Values have ranged from about £3,000 per acre for some of the cheaper woodland to almost £40,000 per acre for a paddock sold by auction near Bodmin. Much of the agricultural size blocks of land, most commonly make between £6-£7,000 per acre, but can vary wildly over quite a small area, making it important to have an agent with good local knowledge.
Amenity land is less appropriate to value on an acreage basis. Commonly amenity buyers can afford to spend between £35-£75,000 for a parcel and sometimes through careful lotting it is possible to achieve multiples of this value. In the autumn of 2015 we lotted 8 acres of woodland near Holsworthy into a 2.5 acre lot and a 5.5 acre lot with Guides of £35,000 and £37,000 respectively. Both attracted far-reaching interest from Warwickshire and Gloucestershire and in less than 3 weeks sold to a local buyer and a buyer from Surrey for prices 50% over their guides.
There is increasing concern that land values may slip either due to increasing supply or reduced demand. At the beginning of 2016 there remains little evidence of either of these, but for how much longer? Regularly farm values have little connection with farm profitability. The proportion of “lifestyle buyer” farms in Cornwall make the South East housing market another significant factor.