South Lakes Market Going Strong
As the Associate Director and Head of Land Agency South Lakes here at H&H Land & Estates, I have rounded up on what was a strong 2022 and look forward to more of the same in 2023
2022 has seen a continued demand for rural assets in the South Lakes, with strong prices still being achieved across the board. Keen interest for a variety of land uses is holding values up well but this is also unfortunately pushing some local purchasers out of the market.
Land and property sales in the South Lakes has been incredibly busy throughout the whole of 2022. From parcels as small as a couple of acres, to large ring-fenced farms, land has been in high demand. Agricultural land prices have held firm, if not risen slightly this year, with bare land usually achieving between £8,000 and £10,000 per acre. However, smaller parcels of land have achieved some very strong prices. Examples were 24.04 acres of rough pasture at Coniston which sold earlier in the year for £11,231 per acre and more recently, this month, 2.73 acres of pasture at Howbarrow sold at auction for £15,568 per acre. Land with potential for amenity, environmental and / or equestrian use is increasingly in demand, with some purchasers willing to pay up to £50,000 per acre for a few acres of rough pasture!
Woodland parcels have been extremely sought after by individuals for amenity purposes, and we are now increasingly seeing interest from companies looking for land for planting trees, primarily for environmental purposes and carbon offsetting but this is also supported by a very strong timber market.
Small parcels of woodland with high amenity value have been very popular too. Examples include 1.91 acres of woodland at Hoales Wood near Broughton-in-Furness, which sold for £20,942 per acre, and 5.78 acres at Tottle Wood near Newby Bridge, which sold for £9,516 per acre.
Earlier this year, we brought 4 acres of woodland with a cabin at Ambleside to the market; a rare opportunity to acquire a piece of land in the heart of the Lake District with potential to develop a dwelling. This generated huge interest from buyers across the country and was sold prior to auction well in excess of the guide price.
We’ve seen sustained demand for small holdings and residential properties with land, from both those already farming and people looking for a rural way of life. In this sector, our auction sales have been particularly successful, and one noted example is Bellow Hill Farm, near Sedbergh, which sold at auction in the spring for £730k, 52% over the guide price.
We have one further auction to come this year on 21st December, of 84 acres at Kirksanton, Millom, and many more already in the pipeline for 2023. We are looking forward to a good start to the year for Land Agency, with our first auction scheduled for February, which already has five lots, including commercial and residential property.
In looking at the residential sector, there was a significant lack of supply in the first quarter, but this gradually improved, and demand has continued to be strong here in Cumbria, with asking prices up 4.8% year-on-year according to Rightmove. The strength of demand has posed a challenge to local solicitors, whose capacity has and continues to hold up completion of some sales. The run up to Christmas has historically seen the housing market slow down but less so nowadays as the majority of people search for property online and the festive holiday period affords people the time and opportunity for reflection which may prompt a move. We have seen a flurry of properties coming to the market hoping to take advantage of this.
Next year will be interesting, will we begin to see the effects of the increased costs of living, borrowing and other factors impact the market, or will market demand still outweigh supply and hold prices up? There is an air of caution in the residential sector with many buyers monitoring and waiting for a calmer market and better mortgage offers. This in turn may deter sellers from bringing their property forward for sale in the early part of 2023.
As well as the impact of increased energy fuel costs and interest rates, the farming sector is going to feel the effects of the reduction in the Basic Payment Scheme (BPS) more acutely than ever this year. Already the reduction in BPS has caused many farmers to take stock and to begin reorganising their businesses, either buying more land, selling land, or transferring assets to the next generation.
So, as we head into 2023, we expect continued demand for land and rural property, with significant growth in demand for land for environmental purposes such as carbon offsetting, nutrient neutrality, and Biodiversity Net Gain. As the market for Biodiveristy Net Gain units increases, more landowners will be looking at how they can generate these on their land too.
2022 has been a year of challenge, change and opportunity. Let us hope that next year, across the farming industry here in Cumbria, we call all work together to address the challenges ahead and to grasp all possible opportunities.