MARKEToverview The property market triangle
Expert valuer Andrew Robinson takes a broad view of the UK property market across residential, commercial and agricultural sectors
I
f one thing is certain now it’s uncertainty. We can reflect on past trends, analyse the current market, talk to customers and look at statistics to predict how the property market will perform in 2011,
but at best these will be intelligent guesses. The truth is that no one, including the Government, really knows how the public sector cuts, redundancies and belt tightening will affect the property market. However, the signs do indicate that things may not be as grim as previously forecast. The British economy and the property market have always had a symbiotic relationship, the state of the property market is considered to be an indication of the robustness of the economy. However, for a true picture, it is important to consider all three sides of the property triangle. When commentators talk of the property market, what many are actually referring to is the residential sector. However, the performance of the commercial and agricultural sectors are highly significant factors in the equation. These three sectors, residential,
agricultural and commercial, do perform separately – but are also interlinked. Whilst many recent predictions have been less
Buy land. They’re not making any
more of it.” MARK TWAIN
than positive due to the general economic gloom, these forecasts sometimes lack a thorough assessment of how all three areas are performing. Not only has the market been more resilient than anticipated, but regional fluctuations are rarely taken into account. So, for the bigger picture, consider the property triangle across the UK.
THE BIGGER PICTURE As a valuer, it’s important to understand the bigger picture. If we are to offer well informed advice and guidance, it’s essential that we keep our finger on the pulse of what is happening across all the market sectors. We also need to look into the future and predict as best we can, how the market might evolve. The facts, figures and survey results make interesting reading, giving some useful hints as to what we can expect for the remainder of 2011.
THE NEED FOR FOOD
One fAgricultural
igure that is constantly rising is the global population – and they’re hungry. The need to deliver enough food to feed a potential world population of nine billion people has ensured that the value of agricultural land remains steady, with resilient commodity prices during the first quarter of 2011. In the UK, arable land prices have remained at approximately £6,000 per acre; approximately double their value of 10 years ago, whilst all the signs indicate a high probability that valuations will have risen over the last 12 months. One of the reasons for this is the number of existing farmers looking to expand, encouraged by the combination of lower interest rates and higher commodity prices. Land is still viewed as a secure investment, whilst the scarcity of supply as always helps to maintain price levels. With a recent United Nations report
estimating that the world’s farmers will need to produce approximately 70 per cent more food to feed the growing population, demand should remain high and arable land looks to stay fairly stable.
PROPERTYdrum MAY 2011 37
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