Fields of Opportunity | The North-West Land Market Trading and Trends

Since the beginning of 2020 we have experienced an upward trend in UK land values and views of long-term growth have always remained strong.  In fact, over the last 10 years we have seen a cumulative increase of approximately 25%, underpinned largely by historic low levels of supply and alternative buyers for purposes such as natural capital and rollover funds.

Ahead of the recent Budget we experienced some hesitation in the market both from vendors and purchasers speculating on how the proposed ‘painful’ Budget might affect them. But sales have inevitably been taking longer in 2024 than they were during the post-Covid peak, when pent-up demand saw huge pressure for sales to complete promptly and avoid further competition.

For those in a Landlord or Tenant or closely connected position, we saw the opposite, with many private negotiations and sales occurring ahead of the Budget.  In instances such as this, it is imperative to seek professional collaborative advice from your accountant, your trusted legal professional and your surveyor. Together they who can guide on land value, tenant discount, tax implications and conveyancing process.    

The continuing strength of the land market in the North West in 2024 has been driven primarily by a sustained demand for small pockets of land, with a premium on locations based amongst larger farms.

In a wet year there has been some reluctance to bring farms and larger parcels of land to the market, and high interest rates have also had a dampening effect. But we have been able to bring a large number of farms to the market on behalf of farmers retiring without family members to succeed them, and a thriving dairy industry has created a strong demand for dairy farms across the region. There has also been a robust market throughout the year for properties sold at auction, particularly small parcels of bare land, and prior to the Budget, cash buyers have been very much in evidence.

Our South Cumbria and North Lancashire office has been instructed on a diverse range of rural properties, including two stand-out examples. In May we completed on Lowick Hall, a 25 acre Country Estate with Grade II* Listed historical house full of character and charm;  in June we launched Mireside Farm, a 114-acre livestock farm in the Lake District National Park. This property, marketed through an informal tender process, attracted competitive bids for all lots, reflecting robust demand.

Post-Budget, we have been instructed to sell a broad range of rural assets, including smallholdings, rural dwellings, parcels of land, and Common Rights in the south of the county.

Looking ahead to 2025, the post-Budget landscape suggests a gradual return to stability, and as a result we may see sales activity start to return to pre-Budget and election levels – a trend that could be further aided by a reduction in interest rates.

We expect to see an increase in post-Budget estate planning due to changes to Agricultural Property Relief and Capital Gains Tax, and a potential increase in vendors looking to mitigate future tax charges through earlier disposal of assets to capitalise on national and local market demand. Older farmers are expected to sell rather than letting or renting out, and the Budget changes to IHT reliefs will make local knowledge absolutely key to accurate valuations.

With pensions now due to be subject to IHT from April 2027, I expect that we may see an influx in smaller investors looking to diversify their portfolio with rural properties (up to £1 million) and mitigate against IHT tax.

Contrary to the Chancellor’s aims, I believe that family farms will be impacted most, while larger farms will be able to take advantage of any drop in values or more land coming on the market and continue to pay any IHT due. Small farms under £1m are in most cases not operated as farming businesses and will remain protected from IHT.

I believe that as 2025 progresses and unfold, these factors will position the rural property market as a focal point for strategic investment and planning. However we do expect to see a steady supply of farms and bare land coming to the market, and with interest rates decreasing, more buyers are likely to be willing to borrow to invest.