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Supply or Demand
The Christmas and New Year period normally sees a turning point in the agricultural property market.
Sales which had been agreed in the autumn are exchanging and completing and our attention turns to preparing properties to bring to market when the clocks change and the first signs of spring come to life. The middle of winter is traditionally a quiet time for launching properties to the market and 2020 is no exception. Indeed the lack of supply through the whole of 2020 has been a significant driver in the market and there is little sign that this may change in 2021. Whilst sales are still continuing to the farming fraternity who will always look at neighbouring land on the market and often have a desire to keep expanding a successful business, this demand is also underpinned and often exceeded by non-agricultural buyers and those farmers who have received funds from outside farming.
Development land has been a significant factor in the market in 2020, and given the scale of house building and other development which is taking place in the country at the present time, this demand is set to continue. There has always been demand in the Yorkshire area from non-agricultural buyers who want to own their own piece of England and the current demand for environmental land, and woodland with is carbon capture ability has been behind sales in 2020.
For those who are waiting for a correction in the value of agricultural land with an alteration in support payments over the next six years, they may be waiting a long time. Land is normally seen as a safe long-term investment in the same way as gold, and like gold is not always influenced by its income earning ability. The market will be underpinned by environmental support payments, and by developers requiring land management contracts for off-setting land taken for development and this market will get stronger.
The current benign rates of Capital Gains Tax for a seller look to be under pressure as the desire to increase tax revenues grows stronger, and this is likely to be one of the most significant factors that will bring land forward in 2021.
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