Why auctions are an effective way to sell land and farms...
Our property auctions this year have seen a flying start with land, farms, and property with development potential all highly sought after.
Selling rural property and land by public auction is a traditional and increasingly popular method of trading, with the main benefit being that there is no property chain and the exchange of contract is on the fall of the hammer. This has certainly been the case for us as Rachel Bagshaw, Head of Land Agency for South Lakes explains.
“This year it is exciting that we have been able to bring back our live auction, these have been hugely successful, and in part have driven the market. Rural properties, particularly those with land, are selling for far above what guide prices indicate and as a result, it is becoming increasingly difficult to give an accurate valuation for properties.
The auction process is advantageous as the bidding process is relatively transparent (subject to the bids passing the reserve level) and as no one can make a bid unless they have the funds available, provided the reserve price is reached or exceeded, at the fall of the auctioneers’ gavel, the buyer is committed to purchasing and immediately expected to sign a contract and pay a 10% deposit.
High demand and limited supply certainly got the season off to a flying start and everything we have sold at public auction has sold keenly and quickly. Our auctions have been outstanding and have seen fierce competition both from local buyers and others from across the UK resulting in farms, land, and property selling well above their guide prices.
There is a particularly strong market for ring fenced farms and smallholdings. Farmers and adjacent landowners are keen to buy more land, and many people are looking for land with high amenity value, and barns or outbuildings to convert. Bare land, provided it is of good quality, is typically reaching prices of £8,000 - £10,000 per acre, while smaller parcels of land and woodland have been achieving £10,000 - £20,000 per acre.
With a rise in the number of people seeking a more rural way of life, properties with land are hugely sought after, and this was evident when we sold Bellow Hill Farm. This 30-acre small farm in the Garsdale Valley with a farmhouse and barns, sold at auction in April for £780,000 - 63% over its guide price.
Parcels of land with high amenity and environmental value are also highly contested and in April we sold Atkinson Ground, 24 acres of productive pastureland and areas of woodland overlooking Coniston Water. Going under the hammer for £270,000 – 50% over the guide price, meaning that it sold at an average price of £11,231 per acre.
On the same day Hodge Hill Farm, a 90-acre traditional upland farm in the Lake District National Park sold for an overall price of £1,345,000. The detached stone bungalow, range of traditional farm buildings with potential for development as well as 38 acres of agricultural accommodation land sold for £930,000.
The two final lots sold as part of Hodge Hill Farm, were 22.79 acres of land selling for £215,000, which was £9,434 per acre, and the final lot 27.47 acres of land being sold for £200,000 - £7,281 per acre.
Our most recent sale was of Corfe Farm at Wharton, Lancashire, the property went up for public auction on the 1st of July and included a farmhouse ripe for modernisation and four acres of land. With a guide price of £300,000 to £350,000 it sold for £405,000, which is around a 25% uplift.
Good land, capable of being cropped, or near to dairy holdings, have also seen record prices achieved, and with an eagerness to increase production, many farmers have shown a desire to extend their acreages, along with maximising the potential of their farm through diversification opportunities.
Interestingly, for the first time, we are seeing buyers looking for land with potential for forestry and future potential carbon and biodiversity offsetting opportunities and this is a sector we expect to continue to grow in the future.
Not everyone is familiar with the procedures for sales by public auction and for many, selling this way seems rather daunting. However, it is a relatively straightforward process. Whether it be housing, pony paddocks, recreational woodland, agricultural land, or farms, securing the required information for an auction can take time and requires a lead-in period of 6 – 8 weeks. Here in Cumbria, there has been a consistent shortage of farmland coming to the market, with demand outstripping supply. So, if you are considering selling a farm or land, now is a good time to start planning, as there are eager buyers of all types including farmers and investors.”
We have regular property auctions and our next auction takes place on Wednesday 20th July 2022, 2:00pm at Ring 1, Borderway Mart, Rosehill, Carlisle. This auction will include two farms, Sunnycroft and Moorhouse as well as additional plots of land.
For any further information on selling by auction, please contact your local branch either by phone or email:
- Carlisle (Estate Agency & Lettings) - 01228 810799 / carlisle@hhlandestates.co.uk
- Carlisle (Land Agency) - 01228 406260 / carlisle@hhlandestates.co.uk
- Durham - 0191 370 8530 / durham@hhlandestates.co.uk
- Cockermouth - 01900 828239 / cockermouth@hhlandestates.co.uk
- Kendal - 01539 721375 / kendal@hhlandestates.co.uk
- Keswick - 01768 772370 / keswick@hhlandestates.co.uk
- Penrith - 01768 840619 / penrith@hhlandestates.co.uk
