Appetite for buying land among house builders, property companies and PLCs alike has increased this year, as housing market activity remains positive, new analysis from CBRE reveals.
Land buyers are seeking land with planning consent to add to their reserves, although good quality land in UK regions is of short supply. Land values in most regions have shown slight growth over the first Q1, mirrored by tentative signs of increased activity in the housing market. Continue reading
Gold, one of the few mainstream investments to have outperformed farmland this decade, has, however, lost some of its lustre, increasing in value by 1% over the past 12 months.
Although investors fed up of poor returns seem to be moving away from low-yielding (or zero-yielding in the case of gold) "safe-haven" investments such as AAA-rated government bonds, there continues to be strong interest in farmland. Knight Frank expects values to increase by a further 4% to 5% over the next 12 months.
Tom Raynham from Knight Frank’s Farms & Estates team said: "Farmland still has a valuable role to play in investment Continue reading
"Construction has a significant part to play in the health of the economy, creating and sustaining jobs within communities, and with fears mounting that it could contract for a second consecutive quarter, getting Britain building will be a top priority.
“So far, the Government’s high profile new schemes and initiatives appear to have lacked the substance needed to bring about a housebuilding revival comparable to the post World War II era. With less than half of the 232,000 new homes needed built last year, we need to see local councils acting fast to ensure new homes are actually delivered in Continue reading
Price increases have historically tended to lag slightly behind the English farmland market, but there is now very little difference in performance
This trend was not lost on investors, said James Denne, who heads up Knight Frank’s Scottish Farm Sales’ team. "I have just sold a large block of good arable land to an investment fund. The price was slightly lower than they would probably have had to pay south of the border, but the prospects for capital growth are just as good."
Investors are also attracted to farmland because it is more tangible and less volatile than some Continue reading
Agricultural rents also exhibited healthy growth reflecting the uplift in land and commodity prices.
Andrew Pearce, head of Rural Agency puts this increase down to a shortage of available land and strong buyer demand. He said: "Commercial farmers are taking advantage of rising food commodity prices whilst investors view the growing population, rising food demand and limited supply of land as a solid long term investment opportunity."
David Hebditch, head of Chesterton Humberts’ Rural Division, said: "Investors are increasingly showing a greater appetite for assets which exhibit good growth potential and are tax efficient.
"Despite the recent adverse weather conditions, there is a compelling Continue reading
The BPF has been calling for the expansion of an institutionally funded private rented sector, which could bring badly needed new funding to develop quality homes for longer-term rent, and meet some of the shortfall in housing building.
Ian Fletcher, director of policy at the British Property Federation, said: “Against the backdrop of these figures we need to seriously think about how we’re going to build the homes this country needs to meet growing demand.
“As things stand the owner occupied model just isn’t delivering the required numbers, and we need to focus on a range of options.
“To improve overall housing supply it Continue reading
Prices have now continually risen since the beginning of 2009. Surveyors attribute the strength of farmland prices to increased demand and lack of available land.
The majority of demand continues to be driven by commercial farmers, keen to expand production to capitalise on high agricultural commodity prices. However, surveyors note that farmers are discriminating in favour of large, top quality neighbouring plots with as small a residential component as possible. As a result, there is considerable price differentiation in farmland, even locally. Plots that are smaller, of lower soil quality or contain a higher residential component are attracting much less interest and Continue reading
Brian Berry, Chief Executive of the FMB, said: "Trusted local trades are ready and willing to help homeowners fit energy-saving measures such as double-glazing and insulation. However, many have expressed frustration that it is not easy for smaller firms to get involved in Green Deal work, and that there hasn’t been a marketing campaign to explain to householders what the Green Deal is all about.
"People want to use their local builder to have energy-efficient improvement work carried out, because they know them and have used them before. But the scheme has been designed so large numbers of small firms are excluded Continue reading
The land market has benefited from many house builders achieving financial stability, now seeking to replenish their land banks. House builders are competing over sites with strong potential for residential development, which are seen as a secure option for investment.
However, conditions vary regionally and as a result house builders are concentrating their land acquisition search and development strategies in those markets with the best underlying economic fundamentals.
Jennet Siebrits, Head of Residential Research at CBRE, said: "Government-backed lending initiatives have helped restore confidence with house builders, for the moment. FirstBuy created 10,000 sales in 2012 and NewBuy produced 1,500 reservations. Slow, yet Continue reading
"In 2012 we saw bare land values rise 6% in the 12 months to the end of the third quarter and equipped land rise by 1% for the same period. As a result the combined ‘all land’ value broke through the £9,000 barrier for the first time.
"While these are great headline figures, they do hide a couple of future price indicators creeping into the market.
Bare land strong
"Demand for bare land remains strong but there is now a clear split between good and poor for both arable and grassland. In addition we are starting to see stronger regional variations with good land Continue reading