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The value of local knowledge

Mon 11 May 2020

George Alder, Head of Stags Farm Agency, looks back on a competitive sale of land in East Devon

Selling a block of productive farm land with good road links in east Devon was always going to result in a competitive sale. But the value of local knowledge of the land market in the area certainly helped Stags to exceed our clients (and our!) expectations.

The land in question was located in East Devon and extended to over 120 acres of predominantly productive arable and grass land. Strategically located near Exeter Airport, with good access to the A30 and the B3174.

The key considerations in undertaking this sale were decisions about the guide price, about whether it should be divided into lots and what would be the best method of sale. To start with, we set a realistic guide price for the land in order to generate interest from both farmers and investors, some of whom had roll-over gains to invest from previous land sales. This allowed the market to dictate the true value.

The most critical part of the sale was how best to divide the land up into lots. We knew that there would be buyers with funds to purchase the whole block of land but in order to ensure the best possible price was realised we decided to offer the land for sale in eight separate lots.

We walked all of the fields to check how the lotting would work with regard to access, services and opportunities to appeal to different elements of the market. The resulting lots were designed to appeal to local residents looking for parcels of land for pony paddocks, farmers looking for accommodation land and investors looking for long-term investments.

With good local demand anticipated and certainty that there were plenty of well-funded buyers, we chose to offer the land for sale by private treaty. This ensured there was flexibility in terms of timescales for the vendor to make a decision, on which offer to accept. It also gave the vendor flexibility in deciding whether the land should be sold in one, two or even eight lots.

This relatively open process meant would-be buyers would also get a feel for the market, with the knowledge that there was plenty of competition giving them the confidence to bid one more time.

We advertised the sale in the Western Morning News and in the Mid Devon Advertiser, and also sent out the sales particulars via post and a targeted email campaign to just over 100 buyers of land who were already registered with Stags. We then marketed the land on our website, stags.co.uk which receives around 200,000 visits per month. Property portals Onthemarket and Rightmove provided us with national coverage. Within a week offers started coming in, at first below or around the guide price, but once competition between would-be buyers began, the offers were above the guide prices.

In all Stags received 27 different combinations of offers and it became clear that two individuals wanted a larger proportion of the lots and knew that the only way they could secure these was to offer on the whole. We brought the marketing to a close by asking for ‘best-offers’ and a sale was agreed for the whole of the land at approximately 38% above the guide price.

Looking back, our knowledge of land sales in the area helped us recommend the right guide prices to generate interest from a wide audience of buyers. Dividing the land into lots also in meant that it appealed to the widest audience of buyers. This resulted in plenty of offers from buyers for the individual lots pushing up offers from buyers who wanted to purchase the whole.

Throughout the past few years it has been clearly evident that the land market has become ever more localised and it is essential to understand who your potential buyers are before marketing: price is still key.

Many small and medium-sized land lots are purchased by adjacent or local buyers, generally within a few miles of the targeted property. Knowing the local buyers in each region and keeping up to date with local market trends certainly puts Stags ahead when selling farms and land.

For more information get in touch with George Alder, email g.alder@stags.co.uk or call 01392 680059.

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