RICS Believe UK Rural Land Prices Will Fall Throughout 2016
The Royal Institution of Chartered Surveyors (RICS) has reported that prices for rural land across the UK are likely to fall throughout the coming year, mainly due to a global decline in crop prices.
Across every sector of the farming industry, the demand for rural land is forecast to decrease over 2016. In the second six months of 2015, only the South East and North East regions saw an increase in the demand for land and it seems to be consistently downward trend.
Land yields did remain relatively static over the last six months of 2015, at 1.8% as opposed to 1.7% in the previous period, but arable and pasture land rents actually saw a drop in price of 4.5% and 4% over 2015.
The latest RICS report shows that 25% of all rural land sales are now to people outside the traditional agricultural community such as non-farmers looking to start up private cottage industries and this is an increase on the first half of 2015 where non-farmer sales were at 18%. South East England has the biggest percentage of non-farmer landowners at 32%. Perhaps surprisingly only 1% of all owners were found to be property developers which is a decrease of 2% on the second half of 2015 and sales to small and individual farmers fell too, by 5%, from 62% to 57%.
The report shows that rural land is becoming much more attractive for non-farmers and those outside traditional rural communities due to falling prices, whilst prices for both residential and commercial properties in cities and urban areas continue to rise. RICS expects the trend in non-farmer purchases of rural land and property to increase, with 25% already being bought by those outside the traditional rural community such as lifestyle buyers and hobby farmers.
RICS Chief Economist Simon Rubinsohn commented: “Start-up businesses do not have to be confined to the trendy streets of East London; Britain’s countryside has a great deal to offer young entrepreneurs. Market conditions appear to be encouraging a wave of new types of rural business, and help must be given to support this trend further if our countryside communities are to thrive.
“New entrants to farming businesses continue to face barriers, but at RICS we are currently working with the Fresh Start Land Enterprise Centre (FSLEC) who are developing a pilot matching service for potential land entrepreneurs, helping to bring together those looking for new opportunities in agriculture with those who have land and rural real estate to let.”
RICS expects the trend in non-farmer purchases of rural land and property to increase, with 25% already being bought by those outside the traditional rural community such as lifestyle buyers and hobby farmers.
Written by: John Padgett on Tuesday 01/03/2016