The Accidental Smallholder Forum
Smallholding => Land Management => Topic started by: doganjo on June 20, 2012, 11:25:28 am
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How about we have a thread with approximate land values - if we all try to set it out the same it'll be easier to read.
2001 - Aberdeenshire - agricultural/grazing - £2000 per acre
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Very much depends on the quality and where it see Savills annual report (pdf)
http://pdf.savills.com/documents/ALMS_2012_low%20res.pdf (http://pdf.savills.com/documents/ALMS_2012_low%20res.pdf)
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How about we have a thread with approximate land values - if we all try to set it out the same it'll be easier to read.
2001 - Aberdeenshire - agricultural/grazing - £2000 per acre
I think in Aberdeenshire its more like £3000 to £5000 now and I believe down south land it can be twice that.
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Prices in the south are meaningless though I'm really struggling with this one
http://www.bidwells.co.uk/view_property.php?property_id=OXF110002&property_type=rural (http://www.bidwells.co.uk/view_property.php?property_id=OXF110002&property_type=rural)
This is snowball's-chance-in-hell-of-building-on-it green belt land presumably intended for use by spoilt daughter's ponies. At £32k/acre it may take a while to sell.
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We are in the Peak District Derbyshire. Prices here are at a premium .....hardly any land for sale, and when there is any there is a lot of people after it, hence the high price per acrea. Most land is now sold by informal tender, so you do not know what other people are bidding,and therefore you have to bid high to get it.
We paid just over £7,000 per acre, for two lots, totalling just over 9 acres. Smaller parcels of land here go for a lot more. An acre paddock sold for £25,000, and 10 acres near us has just sold for £10,000 per acre.
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Land around here seems to be around the £3000/ £4000 if its good grazing but lately there seems to have been a lot of new houses being built with a paddock so I expect land is going for a lot more.
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Sabrina your figures are probably more acurate than mine, the last bit of land I bought was £5000 an acre but I knew I as probably paying £1000 over the odds but it was right next to my house and existing land
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The Crown Estate published numbers today showing that its quarter of a million acres of farmland was valued at an average of £6,156 per acre. I don't know where it all is though.
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We paid £10k per acre in our last place in Scottish Borders but I would expect to pay less now - probably about over half.
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...and this is why buying land is a bad idea.....
Rent, you know it makes sense. :P
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Buy if you can afford it - They are not making it anymore!
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Buy if you can afford it - They are not making it anymore!
That still doesnt make it a worthwhile investment, does it?
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Basically agricultural land has doubled its value in the last 5 years and its predicted to do the same in the next 5 years - Not sure you would get that from many banks ( google agricultural land price increase if you wish)
Second - You are potentially investing in a lifestyle for your family / yourself - not sure that can be priced but valuable none the less
Third - If you own the land then any opportunity that's potentially available in the future whether its building development / diversification into holidays / UK or European grants etc may bring more rewards. This may not be in your own lifetime but it may be a nice inheritance for kids getting a couple of house plots in 40 years time.
Fourth - It doesn't die / fall down / disappear
A long term market but if you can afford it and can get it without paying daft prices ( small plots are always going to be slightly above market value) i believe it is
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A local farmer told me that 5 acres of land has just been sold in Talley for £53,000 and 7 acres went for £90,000. He said no wonder farmers can't afford it but surely it must have been land with an option to build for those prices, at least for the 7 acres.
Sally
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small plots go for BIG money the buyers always live in hope that they can build on it also there is the lifestyle with small plots and these prices are nothing in the grand scheme of things i have seen building plots go for over £200000 for a single house
1964 the value was about £100 per acre and that was including the house and buildings
1990 the value was about £2000 per acre and still including some buildings
now it is all lotted up and the sky is the limit or depends on how big your pockets are :farmer:
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Buy if you can afford it - They are not making it anymore!
That still doesnt make it a worthwhile investment, does it?
i would buy land if i could.
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Buy if you can afford it - They are not making it anymore!
That still doesnt make it a worthwhile investment, does it?
i would buy land if i could.
Me too - it's like Mission Impossible trying to rent land for pigs (even cute, wee, furry ones ;) )
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land is cheaper some places than others.... Our place here with 40 acres is the same value roughly as a 2 bed Victorian mid terrace with no drive or garage we moved from in Hertfordshire....:-))))
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and the big farms around here (Beds/Herts border) all earn rent from business units. Beats farming...
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If you buy land at the right price - your never going to lose 'value' with it. Full stop.
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Until very recently per acre in Somerset (unless moorland) was 6-7 grand per acre but thanks to the giant sheep farmers locally who are buying whole farms at £10 per acre, thats now what we pay. Smaller plots make up to 25,000 for areas even under an acre. Blimmin' criminal! LOL. And that's just GRAZING land!
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If you buy land at the right price - your never going to lose 'value' with it. Full stop.
You could say the same about Greek bonds! But determining "the right price" for land ain't that easy - just ask the Irish or the Spanish.
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A 'bond' is a construct - land is well, land.
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If the s**t hits the fan and the constructs of money evaporated - we'd have to go back to subsistance living - and for that you need land. - But hey thats not really the main reason I think that purchasing land is a dead cert, but a basic point.
As for buying land at £10 per acre - probably some kind of tax scam rather than a true reflection of what the new owner actually had to pay for the land.
If you could buy land at £10 per acre, their would be a cigar flicking fight at a game of craps one evening over a bottle of the finest scotch.
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If you sell a farm, even though a farm is not normally subject to business tax - you will have to pay tax on any profits made from the sale of the land but not the 'house'
So you sell the land at a reduced price and place the main value on the homestead.
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I happen to agree that land can be a good store of value but there's a big pile of "subject to" matters. Land can be
- boggy, lumpy, or otherwise difficult to use
- blighted by planners
- inflated by hope value
- subject to easements etc
- plagued by neighbours
- contaminated
- remote from markets
There is a market price for Spanish bonds even today. Big volumes can be traded because there is market liquidity. But there is no clearing price for Spanish property at all. Individual properties are traded but on a very small scale and at prices which continue to head down. A lot of Spanish, Portuguese, Italian and Irish property is simply impossible to price - because there are no buyers, and there are no mortgages for any buyers there might be.
The UK is differently placed. There hasn't been a real residential property crash yet. That's because interest rates are about zero and lenders are showing considerable forbearance in the face of significant problems with their borrowers. Remember negative equity in the eighties when the banks acted much faster? When the economy does recover all that quantitive easing printed money will turn into inflation unless interest rates rise - except that colossal numbers of mortgages will then become unaffordable.
That current house prices are unaffordable already is a fact. There is a big demand for affordable housing driven by family sizes shrinking rather than pure population growth. This implies that a lot of existing property is too big for the new smaller family units - but it is certainly too expensive.
Farmland prices are anomalous. Many highly mechanised farmers make modest or negative returns while paying rents that yield tiny returns to landowners. The stunning growth in crop yields and milk outputs have been negated by lower prices paid by supermakets so the farm of today requires someone to invest truly vast sums of capital which make a negligible return. But then there's the capital gain isn't there? Well, there is for vast institutional quality estates, but I'm unconvinced that all the land that will be sold by farmers giving up the business is capable of being absorbed by the rest.
I think I've argued myself into selling while I can....
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Just to give a different perspective on land prices...
Here in financially ok Australia (thanks to our huge mineral resources, and China's huge demand), prices aren't that different, really:
In the area where I grew up, and where I want to return to when I can (central Victoria), prices can range anywhere between $2500 per acre up to $15000 per acre (that's about 1600 pounds to just under 10,000 pounds per acre, at the current exchange rate). Of course, that varies - those prices are from around 15 acre lots to 160 acre small farms, and it totally depends on location, type of land, how improved it is, whether there are any structures on it (those prices are for land only, but may have a shed or a an old shack or something, no houses). Unfortunately because it's so dry here (compared to the UK) you can't have the same number of animals per acre as you might do over there - the pasture just can't sustain it. Again, depending on where/what/how, you'd expect to have at least half the stocking rates of UK farms here (this is total guess work but from my meagre research, it seems about right). That said, we have a hell of a lot more space.
As one more comparison - I do marketing for a couple of residential land developments on the urban fringe around melbourne, where the prices can range from $200,000 (about 130,000 pounds) for a 320 square metre block of land, up to about $900,000 for a 900 square metre block. We only sell really high-end stuff, and so these prices tend to be top-of-the-range, but then the land is pretty special (for residential, suburban land), so it all works out. If you know what you're doing, you get what you pay for.
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Buy if you can afford it - They are not making it anymore!
That still doesnt make it a worthwhile investment, does it?
i would buy land if i could.
Me too - it's like Mission Impossible trying to rent land for pigs (even cute, wee, furry ones ;) )
Ditto - The way I see it is that word population is higher than ever before and still going up and people, on average, are getting weathier (in china & india for eg) and wanting more food per person.
Even with GMO's there is a limit to the amount of food that can be produced / acre so productive farmland almost has to be going up in value.
I think this Is why i'm now on 30 acres and living in a static caravan :)
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Intuitively land values have to rise because increasing population puts more demands on a static quantity of the stuff whether for housing or for food.
Practically though, the returns made by farmers can't pay the rents that big values should attract. The fact is that institutional investors don't know one end of a cow from the other.
Alice, when I was in Sydney in 2007 farmland out to the west around Richmond had become insanely expensive because it was being bought up by people wanting polo grounds. I'd never seen fencing of such quality and in such quantity anywhere before. However by 2008 when I last went the same land was all back on the market at any price as the property guys, particularly Centro, hit rocks. I guess the happy man would be the farmer who sold high and bought back low.
in really bad times land allows you to grow food and survive. But don't forget the three basic asset classes need for survival are
1 food, or a means of production such as land
2 a means of exchange (gold or suchlike, so you can buy foods you can't produce or tools)
3 the means to keep hold of 1 above
which in shorthand are known as Canned Food, Cash and Cartridges
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2 of them i can do!
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My thinking is that farm land is currently a bad investment in terms of potential income as opposed to the value tied up in an asset. Land that is really only farmable would be a toxic asset if its purchase meant no funds to farm it effectiveley. My landlord has 1500 ac plus more tennanted and he cant see the point in buying - sees it as a vanity because hed be dead before he saw a proper return and hes only 40 odd. I have a feling either farmland will crash at sone point (Im 32, I can play the long game) or we will all end up working for one massive "farmco". Either way, my skills are relativeley in demand, so I should be able to survive. At the moment land to rent is in fairly plentiful supply as older farmers without willing sons want to do less but not leave the farm, it seems. I'm mostly talking grazing here and I have heard cattle grazing is easier to get than sheep grazing. Get a good reputation and suddenly land seems to open up to you. You do, however need to knock doors/place as/ring people etc.
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there is a farm for sale just now it is on a hill at one time it was a good farm very productive both with grass and grain by all accounts it has been misfarmed by the present owner and some of the stories are just insane anyway a certain farmer has looked it and the asking price is around £10000 an acre this farmer that looked it had a relation that bought a farm less than 2 miles from this farm back in the 80s/90s he paid around £2000 an acre for that one never had any borrowings or debt till he purchased this additional farm the projected income never materialized interest went over 20% with the end result the bank took both farms of him to clear the debt i think he needs to ask his relations for advice
will land keep on rising will the present financial troubles still be here in 5 years when big financial institutions start selling of land that just may be the time to hold of buying
not that many years ago you could have a choice of venue as to what farm sale you could attend and in any part of the country sometimes up to 3 sales in the one day cant remember when the last roup was held an indication that nobody is selling because there are no buyers :farmer:
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If you buy land at the right price - your never going to lose 'value' with it. Full stop.
Try telling that to white South African ex-farmers...
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;) ;) ;) ;)
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will land keep on rising will the present financial troubles still be here in 5 years when big financial institutions start selling of land that just may be the time to hold of buying
:farmer:
bang on. then all the loans taken out to buy the land will be in negative equity. like the 80's
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will land keep on rising will the present financial troubles still be here in 5 years when big financial institutions start selling of land that just may be the time to hold of buying
:farmer:
bang on. then all the loans taken out to buy the land will be in negative equity. like the 80's
Thought they were already ;)
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Well I don't pretend to know what's going to happen in the next 5 years or so, but I don't personally care what the land I've bought will be worth in that time frame 'cos I want to stay here anyway.
And whilst it may be worthwhile to wait 5 years for the whole system to crash before buying - that assumes that the cash you were sitting on for that 5 years would still be worth anything after the crash.
Useable land will always have a value whilst there are people to feed - cash? well it'll make adequate tinder I suppose. ;)
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The institutional owners - pension funds and the like - don't borrow. They have a constant stream of cash to deploy and a pretty long horizon over which to invest. Agricultural land has done pretty well over the long term, and it has a very different risk profile to equities or government stock (lord help us). A good return is only part of the investor's needs - some certainty over the longer term is needed in at least some of the portfolio.
Interestingly, or worryingly, quite a lot of big land purchases have been by foreigners. There is a definite agenda by some of the richer countries with more challenging climates to secure their food supplies by buying land in more temperate areas.
When governments and currencies are no longer secure land does give a better cash return than gold and is plain useful too.
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And fortunately, the speculators till need someone to farm the land.....
Until the revolution comes that is, Commrades. :farmer: