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BREXIT IS NOT SIGNIFICANT?
Article by Rod Cordingley for the Farmers Guardian.
The housing market has had more influence on the value of farmland in Yorkshire this year than any concerns over Brexit, and the future of agricultural support and profitability.
The market in 2017 has been led by farmers and landowners who have sold land for residential development and are looking to reinvent the proceeds to expand their existing businesses, keep a safe investment, and enjoy the rural lifestyle.
For over 20 years we have been redeveloping brownfield sites in towns and cities, but as the supply of these sites dries up, and the political climate is favouring building more houses on greenfield sites, this is putting significant cash into farmers pockets again. Such windfalls have a strong probability of being reinvested back into land and farms.
So whilst our farming customers are all anticipating a drop in land values, the opposite can be the case in certain areas, most particularly if there is also an entrepreneur living in that area who has sold his business out and made a conscious decision to invest in farming.
The result this year has been a polarised market, where quality is in demand, and second rate land with a disadvantage can really struggle. No longer will inflation bale out an over exuberant Valuer and the skill of valuation is now more marked than ever.
That skill has to look at the quality of the land without doubt, but also has to second guess who is active in that particular area and look at other transactions that have taken place recently as comparables.
With fewer buyers in the market place it is resulting in two types of valuation . The valuation for sale is more straight forward and is an anticipation of what price the land may make in the near future.
Do not be surprised if this is a different figure than the ‘market valuation’ given to a bank or other lending institution.
This value is asked to disregard a ‘special purchaser’, which means disregarding a neighbour, or local with windfall money at the time. Yet is it these purchasers who are dominating the market and providing the comparable sales which Valuer’s consider in arriving at the valuation.
My lecturers at University taught me that valuation is an art not a science. There is only an opinion, not a definite answer with access to the figures for sales across Yorkshire we aim to provide an educated opinion. In the end, only a proper marketing campaign lets the market decide the true sale value.
Rod Cordingley BSc FRICS FAAV is a Chartered Surveyor with Stephensons & Son at York
Call: 01904 489731 or Email: firstname.lastname@example.org