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There are tax advantages, too, associated
with working farms. Agricultural reliefs
allow farms to be passed on in the family
without inheritance tax being paid. It’s
even been suggested that farms look more
attractive as a means of saving for the long
term now that the recent Budget has
restricted pensions relief for high earners -
though there is no income tax advantage.
To a lesser extent low returns on other
types of asset are an argument for investing
in country houses, too. Andrew Shirley,
head of rural property research at Knight
Frank, says; “buyers, particularly those with
money on deposit at low interest rates, are
certainly starting to perceive that property
now offers value for money again.”
Savills also predicts that the farm market
will become increasingly polarised, with a
high premium for prime agricultural land.
Prime arable, for instance, could get £7000
an acre, and prime dairy land as much as Another from Savills book offers a
£10,000 an acre, against the average of five-bedroom farmhouse and a 458 acre
round about £4000. The East of England arable farm with development potential,
and West Midlands, in particular, are likely complete with a grass airstrip. It’s in
to see higher prices as their higher quality Potton, Bedfordshire – on for £4m
acreage achieves a premium.
Ian Bailey adds, “Big farms are hot. The months for country house sales. But it does
investors want big farms because they’re seem that now sellers have adjusted their
looking at income,” and economies of scale asking prices downwards to realistic levels
bring higher profits. – in some cases as much as halving the
asking price – the market is becoming
THE COUNTRY HOUSE MARKET more active. Still, it’s not back to 2007
As for the country house market, it’s levels, and some estate agents may have to
difficult to tell, but Knight Frank reports slim down further to keep solvent.
that some bargain hunters are coming back The increased volume of sales is partly
into the market, and there’s even been down to the influence of overseas
some competitive bidding for country purchasers, attracted by sterling’s weakness
Overseas buyers houses recently. Rupert Sweeting, head of against other currencies, and particularly
used not to have
country department at Knight Frank, says its fall against the euro. Rupert Sweeting
“Viewings are starting to approach normal notes that in addition to euro-based
much place in the
levels.” March saw a one per cent increase buyers, Russians and other CIS
in transaction volume over the same nationalities are heading for the English
agricultural market,
month last year. This quarter will be crucial countryside. While they’ve been an
– from Easter to June are the prime influence on the London market for some
but they have years now, they haven’t up till now been
become increasingly
such a big influence on the country house
market, but that looks as if it could change.
important recently.
But the main source of demand for land
now appears to be the larger farmers and
That’s likely to
investors, buying up acreage to expand
their portfolios. And that, perhaps, is one
continue, given the
thing that the agricultural sector does have
weakness of sterling
in common with buy-to-let – it’s getting
more and more difficult to be a small
against other major
player, and the big guys are entrenching
themselves even further.
Here are 228 acres of arable land at
Miltonbank, Forfar in Scotland.
Do you have any comments to share?
RUPERT SWEETING, KNIGHT FRANK The freehold is available for £1.2m
PROPERTYdrum JUNE 2009 69
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