Not Just an Auctioneer – An Optimistic Rural Property View

As the son of a Scottish Farmer, dealing with livestock has always been part and parcel of my daily life. Indeed, with a father who also spent 32 years as an Auctioneer, it is hardly surprising that my weekly duties now include selling at Malton Market every Tuesday and every second Friday.

With a professional background working for a National firm in Scotland for over 13 years, ultimately as head of farm sales covering the whole of Scotland, I have sold everything from the best arable land to the poorest moorland with everything in between.

Indeed, knowing the market, along with potential purchasers, is key to finding the best sales strategy and concluding a deal. Having correctly predicted, at the onset of the Covid 19 Pandemic, that demand for rural property would go stratospheric (a Radio 4 slot on the Farming Today programme confirms this), we now find ourselves again at a point in time of great uncertainty. With inflation heading towards record levels and commodity prices showing no sign of abating, it is easy to predict that an economic crash is imminent, particularly with the rapid property price increases we have seen throughout the country.

Inflation can be a tricky beast to contain and at present, the slow Bank of England interest rate rises have done little to counter the current upward trend. UK employment is at a record low and whilst consumer spending is being squeezed, British output continues to remain strong (currently on a par with India!).

Looking specifically at agricultural properties, inflation can be beneficial to farming in general. Equipment, whilst expensive, holds its value well which assists with fixed costs. Inputs continue to rise but with cereal prices over ￡300/tonne, even sold forward at harvest, the outlook in the short term looks positive. Wheat prices tend to follow the price of crude oil and with demand continuing to outstrip supply, this is unlikely to change in the short to medium term. Rapeseed oil has taken a huge jump this year due to a lack of sunflower oil availability and unless the war in Ukraine stops this summer, increased prices will be prevalent well into the next few years.

This has a direct impact on land values, particularly since the government remains focused on increased tree planting and environmental schemes. As ever, the government continues to chase the curve and is so out of sync with today’s farming mentality, blissfully ignorant to the impending food shortages currently being faced, that savvy farmers who focus on farming efficiency will face a brighter future than those chasing subsidy payments.

Demand for good quality arable land shows no sign of diminishing with soil quality, levels of organic matter and resistance to drought/flooding, all being key factors for the future farm market. Investing in the land is going to become more imperative than ever going forward and I am a firm believer that chasing yields should be balanced with improving soil and fertility resilience, especially given the increasing probability of unpredictable weather.

Demand for beef and lamb has remained strong over the past 12 months and with total numbers continuing their historical decline, those businesses who remain committed to livestock farming are likely to see future sales opportunities continue in a positive direction. This in turn will maintain strong demand for lower end arable and grassland farms brought to market, even without an element of underpinning from current environmental/forestry buyers.

At the start of the Covid 19 pandemic, rural property demand was driven by a shift in priorities; urban dwellers who looked longingly at the countryside for a sniff of freedom, away from locked down towns and cities.

Now, demand for farms is going to be driven by farmers. Desperate to feed the nation.

Stewart Hamilton is an experienced Senior Surveyor working out of the Boulton Cooper office in Malton who can assist with all sales requirements.