Financial view on how the land lies

Selling farmland is never simple and requires expert knowledge. Chris Berry meets one farmer turned land agent who is doing just that.

Farm values can often give a misleading impression. If you’re looking from outside the agricultural world you might think every farmer has an easy option if things aren’t working out. Surely they could just sell up and live off the proceeds, sometimes running into millions.

Whilst that has happened and farmers have taken this escape route out of the industry, either because there is no family succession to consider or they have simply had enough, the vast majority stay and, in many cases, purchase more land to provide economies of scale.

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On-paper wealth can offer a useful insurance if things get too hairy, but not every farmer is a landowner and for those who are not there is the fear that the land they are tenanting will be sold to a new owner, bringing with it new insecurities.

Robin Jessop has been involved with professional work on behalf of landlords and tenants for over 30 years since learning his trade in County Durham after attending Durham University. He has specialised in the valuation and selling of farms and land throughout his career as well as livestock auctioneering, largely in the area he grew up in around Wensleydale and the Vale of Mowbray.

“My mother Mary and my uncle George had a mixed farm of 250 acres at Carthorpe, just south of Bedale, which my brother John went on to farm. There was only really room for one of us so I wasn’t encouraged to take my interest any further.

“I always enjoyed the livestock side of farming, which is perhaps one of the reasons why I became a livestock auctioneer and felt so much at home.” Ten years ago, immediately after the horror of foot and mouth disease that brought so much heartache to Wensleydale and the rest of North Yorkshire, Robin moved on from the livestock market and land agency business he had been with for 20 years in Northallerton. He opened up his own practice in the market town of Bedale.

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“It was a real leap of faith for Valerie and I. Our three children were all young and at school and no-one could tell how farming was going to recover. There were so many imponderables at the time, not least of those being how farms would move forward. The farms and land market had been in a straitjacket for at least 12 months and there was a danger that when it was able to restart prices and demand would be affected.”

Fortunately the market soon returned once disease restrictions were lifted. Some of those who lost their livestock took the “king’s shilling” of compensation, sold their land and moved out; others bought additional land that came up as a result.

In the past decade Robin has seen all the ups and downs that farming has gone through. He has watched the continuing drain of dairy farmers from the industry because renewing their parlours is not cost-effective given the milk price they have been receiving. He also saw how a second wave of foot and mouth disease restrictions in 2002 brought further anxiety and provided another barrier to farm sales during the ensuing years.

“Back in 2005 the non-farming sector was outbidding local farmers for farms and land. We are very fortunate to live in a beautiful part of the world and that attracts those with money from property they have sold elsewhere to take on farmhouses and land they can buy for less than they have received for theirs.

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“The change in recent times has been that local farmers are now competing with each other again. That is largely due to livestock and cereal prices being better than they were, although there are still many challenges, particularly over input costs.

“The incentive to sell farms has not been as great as it was when we first started the business a decade ago. That’s because the general economic climate in agriculture has improved. There is greater confidence in farming at present and when that happens you generally a see a lack of farmhouse and farmland coming onto the market.

“This can have a beneficial effect for those wishing to sell as there is a demand that is outstripping supply and that usually translates into higher sale prices. In the past 18 months, I have never seen a wider spectrum in the price of agricultural land. What I would term commercial parcels of land have been sold from £3,000/acre to £10,000/acre; and in the Vale of York, within a 10-mile radius of Thirsk where it is prime agricultural land prices have varied from £8,000/acre to £10,000/acre. The sale price of bare land is all about what it is, where it is and who wants to buy it. It is often determined by neighbouring competition.”

The beauty of Wensleydale and Swaledale is still an attraction to non-farm buyers too and the sale of rural cottages and country houses is another specialism.

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“We see many prospective purchasers from the south of England and from West Yorkshire looking to move here to either retire or semi-retire. But the demand is far and wide. Last year we sold a property at Thoralby, near Leyburn, to a couple in New York; and another in Grinton, near Reeth, to a chap from Hong Kong.”

LOTS OF OPTIMISM IN PROPERTY MARKET

This week Robin was due to hold one of his regular property auction sales at Solberge Hall, near Northallerton, but such was the demand that two of the five lots were sold prior to auction. Farmland at Easingwold and Scruton was all that survived.

He also sold a farm at Welbury for £1.34m through a previous auction sale in August.

Robin has recently been instructed to conduct the sale of properties owned by the Ministry of Defence in the former military village of Downholme, near Richmond. An auction is scheduled for November 14.

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