Auctions can be a gamble but you could land rewards
As the General Election looms and the Brexit situation seems more uncertain than ever, the farming community, as so many times in the past, tries to remain optimistic about the future of UK farming.
With the availability of land scarce, opportunities to buy have to be taken as and when they arise.
We recently offered two parcels of land for sale near Stafford and after careful consideration decided that public auction was the best method of sale. This is not always the case, particularly for larger blocks of land which will inevitably require some sort of lending which takes time and expense to arrange and doesn’t necessarily marry with the auction process. However, on this occasion our plans were rewarded with Lot 1 (29 acres) reaching £364,000 and Lot 2 (5.16 acres) making £28,000 despite the fact that interest seemed minimal during the marketing campaign.
Lot 1 made well over the guide as three local farmers battled it out for the land, and it finally sold for just over £12,500 per acre. The mainly arable block of Grade 3 land also had a section of river meadow and ran up to the edge of the village of Derrington, near Stafford.
Land on the edge of villages can be a mixed blessing, with the possibility of trespass on the one hand and the potential for long-term planning potential on the other, although this was in a spot unlikely to see any development for many years to come and in any event there was a modest clawback should there be future building.
The sale highlighted the difficulty of accurately valuing land as the market has been more sluggish of late but it proves that where local demand is high, exceptional prices are still being achieved. The eventual buyer was a local fruit grower with the under bidder being a large scale dairy farmer desperate for additional land.
Lot 2 was a different kettle of fish, being a small block of arable land with some access issues. It was bought by a local farmer whose land adjoins and the achieved price of £5,426 per acre reflected the lack of highway frontage.
Selling by auction is often something of a gamble, especially in an unpredictable market, but in this case it paid off handsomely and the seller was delighted with the result.
What it does highlight is that there is no substitute for sound professional advice from a reputable agent with local market knowledge.
Mike Taylor FRICS, FAAV, FNAEA is Senior Partner of Barbers Rural Consultancy LLP
