Property spot

News

31 March 1990

The few farm and estate transactions which have taken place so far have largely been tying up loose ends, and any newcomers are being launched into a thin market.

Unlike last year, there is no sign of any significant volume of land being put up for sale before May.

Agents insist, on the whole, that the market will remain stable this year and this is a good time to sell. But vendors are holding back. Statistical evidence that prices are taking a turn for the worse must be partly to blame.

The Ministry of Agriculture’s Current Agricultural Land Price (CALP) series shows a 16% fall in the weighted average price of land between September and December 1989, to £2,100 per acre. The Strutt & Parker-sponsored analysis of these figures by Wye College of Agriculture is no more encouraging. Even auction results in the latter end of last year were showing fragility, according to the latest issue of Farmland Market.

Published by Farmers Weekly, and including results published in Estates Gazette, it shows that farms of less than 50 acres suffered the most, losing an average 30% in value.

Roll-over money from sales of land is still around and snapping up the best commercial holdings, but its influence is dwindling. Only 14% of last year’s acreage was bought with such funds, compared with 42% in 1988, according to Savills’ latest land price survey, covering 220,000 acres.

Uncertainty among those with high borrowings or impatient beneficiaries will inevitably bring more to the market this year, particularly in the cereal sector. One example is a well-known Bedfordshire farming family, the Parrishes, who have announced the sale of about a third of their land. They farm more than 4,000 acres on the Bedfordshire/Hertfordshire borders and hope to raise up to £3.5m through William H Brown and Robinson & Hall, but three fine houses are also included in the sale. More commercial farms are coming on to the market in the east for around £1,700 per acre.

Investment is strong in other sectors. International sugar giant Feruzzi, based in Italy and making news with the speculation about the future of Berisford and British Sugar, have purchased Sir John White’s 2,000-acre Saxlingham Estate in north Norfolk. The farm, which has a good sugar beet acreage, farmhouse and 10 cottages, lies only about 15 miles from Feruzzi’s 2,500-acre Barton Bendish estate and went for around £3.6m.

Shrewd forays have been made by two of the newer institutional investors. Savills and Cluttons have already pulled in best offers for a 7,000-acre portfolio of 21 tenanted farms in East Anglia. Owned by property group Mountleigh, whose farms portfolio was built up by the former chairman and chief executive, Tony Clegg, over the past three years, the land offers few residential titbits. But, in commercial farming terms, most is classified grade 1 or 2 by the ministry of agriculture. A £6m guide price offered a yield of more than 7%. The agents have been pleased with the overall response and hope to sell as a whole.

Postel, the pension fund of the Post Office and British Telecom, looked at their successful property book and decided that a readjustment was needed. The pin fell on five arable farms with vacant possession in Hampshire and Wiltshire, which could release £20m during the next 18 months.

The news is not good for Booker Farming, who have been managing the farms in partnership and could lose up to 8,500 acres of their 25,000-acre business.

First sales through Knight Frank & Rutley this summer will be two farms in Wiltshire, running to 951 acres with irrigation and 750 acres with milk quota respectively.

The few farm and estate transactions which have taken place so far have largely been tying up loose ends, and any newcomers are being launched into a thin market. Unlike last year, there is no sign of any significant volume of land being put up for sale before May. Agents insist, on the whole, that the market will remain stable this year and this is a good time to sell. But vendors are holding back. Statistical evidence that prices are taking a turn for the worse must be partly to blame. The Ministry of Agriculture’s Current Agricultural Land Price (CALP) series shows a 16% fall in the weighted average price of land between September and December 1989, to £2,100 per acre. The Strutt & Parker-sponsored analysis of these figures by Wye College of Agriculture is no more encouraging. Even auction results in the latter end of last year were showing fragility, according to the latest issue of Farmland Market. Published by Farmers Weekly, and including results published in Estates Gazette, it shows that farms of less than 50 acres suffered the most, losing an average 30% in value. Roll-over money from sales of land is still around and snapping up the best commercial holdings, but its influence is dwindling. Only 14% of last year’s acreage was bought with such funds, compared with 42% in 1988, according to Savills’ latest land price survey, covering 220,000 acres. Uncertainty among those with high borrowings or impatient beneficiaries will inevitably bring more to the market this year, particularly in the cereal sector. One example is a well-known Bedfordshire farming family, the Parrishes, who have announced the sale of about a third of their land. They farm more than 4,000 acres on the Bedfordshire/Hertfordshire borders and hope to raise up to £3.5m through William H Brown and Robinson & Hall, but three fine houses are also included in the sale. More commercial farms are coming on to the market in the east for around £1,700 per acre. Investment is strong in other sectors. International sugar giant Feruzzi, based in Italy and making news with the speculation about the future of Berisford and British Sugar, have purchased Sir John White’s 2,000-acre Saxlingham Estate in north Norfolk. The farm, which has a good sugar beet acreage, farmhouse and 10 cottages, lies only about 15 miles from Feruzzi’s 2,500-acre Barton Bendish estate and went for around £3.6m. Shrewd forays have been made by two of the newer institutional investors. Savills and Cluttons have already pulled in best offers for a 7,000-acre portfolio of 21 tenanted farms in East Anglia. Owned by property group Mountleigh, whose farms portfolio was built up by the former chairman and chief executive, Tony Clegg, over the past three years, the land offers few residential titbits. But, in commercial farming terms, most is classified grade 1 or 2 by the ministry of agriculture. A £6m guide price offered a yield of more than 7%. The agents have been pleased with the overall response and hope to sell as a whole. Postel, the pension fund of the Post Office and British Telecom, looked at their successful property book and decided that a readjustment was needed. The pin fell on five arable farms with vacant possession in Hampshire and Wiltshire, which could release £20m during the next 18 months. The news is not good for Booker Farming, who have been managing the farms in partnership and could lose up to 8,500 acres of their 25,000-acre business. First sales through Knight Frank & Rutley this summer will be two farms in Wiltshire, running to 951 acres with irrigation and 750 acres with milk quota respectively.