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Farmland values in England down almost 2% in final quarter of 2015
English farmland values fell by almost 2% in the final quarter of 2015 to end the year at £8,165 an acre, according to the latest index report. The data from the Knight Frank Farmland Index shows that it was the first quarterly fall since December 2012. However, the average value of bare agricultural land still rose 4% in the first half of the year and 3% overall during 2015. This compares with a rise of 1% for prime London residential property and falls for the FTSE 100 of 5% and gold down 7%. Looking over a wider period of time farmland in England has increased in price by 41% over five years, by 196% over 10 years and by 5,089% over 50 years. The Knight Frank report suggests that there are a number of reasons why values have come back. ‘The continuing run of low commodity prices had to have an impact on buyer confidence at some point. Feed wheat is worth just half of what it was fetching just a few years ago and many dairy and livestock businesses are struggling to remain profitable,’ said Andrew Shirley, head of rural research at Knight Frank. ‘The fact that land values have held up so well indicates that commodity prices are far from the most important driver of the land market,’ he explained, adding that uncertainty about the outcome of the European Union referendum, likely to be held this year, will also be holding back some potential buyers concerned about the potential impact of a Brexit. The delayed payment of agricultural subsidies to some farmers and a potential hike in interest rates will also have dampened spirits. Currently Knight Frank is not predicting that the fourth quarter fall presages a long run of prices drops. ‘Indeed, assuming the UK votes to remain in the EU, it is entirely possible that 2016 could see prices rise slightly,’ said Shirley. ‘Many farming businesses, particularly those with profitable renewable energy schemes, remain cash generative and are looking to expand. There are also a significant number of farmers who have sold land for development or via compulsory purchase and are looking for agricultural property to reinvest into,’ he pointed out. ‘The market will continue to be extremely localised. Large blocks of investment grade land which were achieving prices of over £13,000 an acre last year may see values come off as investors await the outcome of the EU referendum, but where there is competitive bidding from local farmers, values will remain firm,’ he added. Continue reading
House prices in Scotland up twice the rate of England and Wales
House price growth in Scotland is outpacing that seen in England and Wales with values up 0.8% in November, twice the rate seen in the rest of the UK. This takes the average price of a home in Scotland to £169,850, up 2.4% compared wot November 2014, according to the latest index from Your Move. East Renfrewshire had the biggest upswing as new home developments lifted prices 5.2% since October and overall it was the strongest November for home sales since 2007 with transactions up 13% year on year. According to Christine Campbell, Your Move managing director in Scotland, the rise provides a welcome bounce back for home owners after a turbulent year but house prices are still below March’s record peak. The driving force behind this up and down has been the introduction of the Land and Buildings Transaction Tax (LBTT) last April which while lowering tax for the vast majority of buyers has hit the top end of the market. However, as high end housing stock starts to shift again, price rises are strengthening in more expensive areas but Campbell warned that the growth spurt may be short lived with the 3% surcharge on second home and buy to let property purchases coming into force in April. ‘If the impact of this tax increase mirrors the effect of the LBTT, we may see a sharp spike in values at the start of 2016 as buy to let buyers rush to avoid the tax hike, followed by a sudden dip after its introduction,’ said Campbell. ‘Investors may well be dissuaded from purchasing additional properties then, with a £250,000 home liable for an extra £7,500 in Stamp Duty once the tax is implemented. Sellers may find themselves having to subsequently reduce prices to make their properties more attractive, accounting for the higher surcharge for some buyers. There have been cases of some developers offering £10,000 contributions towards the LBTT in order to sell their units,’ she explained. The data also shows that on the back of strong monthly growth in October, East Lothian has now overtaken Inverclyde as the mainland region with the highest annual increase in property prices at 10.9%. ‘This region illustrates the recovery in the top end of the market with 30 sales of properties worth over half a million pounds in the last three months, a significant improvement on 18 sales in the same period last year,’ said Campbell. ‘The most notable of the sales was a nine bedroom property going for £2.6 million, the second most expensive property sold this year. This marks a clear turning point when you consider the drought of million pound home sales immediately after the introduction of the LBTT,’ she pointed out. She also explained that November’s home sales have defied the odds by avoiding the usual seasonal slowdown. Transactions increased 1.2% month on month in a period where there is usually see a 4% dip. South… Continue reading
Half of landlords in England unaware of start date for right to rent rules change
Half of UK landlords are not prepared for the Right to Rent legislation set to come into force on 01 February with some thinking they had another two years to wait. Indeed some 20% believed that they had until April 2017 to prepare for the changes, while 3% believed they had until 2018 to get ready, the research from online estate agent Urban shows. The new legislation, already implemented in the West Midlands, will soon require all landlords and agents in England to check a tenant’s immigration status or ‘right to rent’ in the UK. A failure to prepare could leave landlords at serious financial risk, with potential fines of £3,000 if they do not comply. The survey report also found that only 10% of landlords provide the correct information to tenants at the start of a lease and 90% were unable to identify the characteristics of a House in Multiple Occupancy (HMO). Some 16% were putting themselves at serious financial risk by failing to provide a valid contact address on tenancy agreements; an action which could see contracts being deemed as null and void. One reason to explain the lack of industry knowledge could be due to the rise in accidental landlords who rent property due to circumstance beyond their control such as having inherited property, according to the firm. ‘There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes. Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords,’ said Adam Male, Urban cofounder. However, despite a lack of understanding in some areas, reassuringly, the majority of landlords were abreast of most other rental fundamentals. For instance, 77% were aware of the need for an up to date Energy Performance Certificate (EPC) and 95% of landlords correctly identified their gas safety responsibilities, 76% also knew the need for a smoke alarm on every floor and 7% even put one in every room. The Landlord Knowledge League Table, a map which ranks the most knowledgeable regions in the UK according to the survey results, found that the most knowledgeable landlords let property in Southampton, while those in Newcastle-under-Lyme were unaware of many key landlord responsibilities. ‘It is great to hear that knowledge about things such as gas safety is a widely understood and implemented landlord legislation, however, there is still a long way to go in educating landlords about the varying aspects of renting,’ said Male. ‘New regulations such as the Right to Rent have the potential to stop back door lettings and create a better environment for all, however, this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to clean up the industry and help landlords protect… Continue reading
