Farmers Waiting for More Clarity Before Buying Land
According to recent research by estate agents Strutt & Parker, a larger share of farmland is being purchased by private investors.
The research shows that the share of purchases by farmers, traditionally hovering between 60 and 65 per cent, has dropped to 50 per cent over the last 6 months. This is the lowest level in ten years, with the slack being picked up by private investors and lifestyle purchasers.
The main reason is thought to be uncertainty over Brexit and what it holds for the future. There are still many vital questions remaining around what might replace the EU’s agricultural subsidies, which are seen as vital to the viability of many farm businesses.
Private investors face less uncertainty, seeing the purchase of land as a more of a tax efficient way to increase the diversity of their portfolio and long term investments. They are under less pressure to generate operating profits from the land.
Also worth considering is the different factors looked for before purchasing the land. While farmers will assess the productiveness of the land and closeness to their current holdings, investors may be more prone to look at the development potential for the future.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.