As if proof were needed that land values can be resilient, arable land prices in south east England, my own area of operation, achieved a five per cent growth in the second half of 2015 according to the latest RICS / RAU survey.
While arable land in the south east rose to £10,500 in H2, in the neighbouring south west the trend reversed with a 7.7 per cent fall to £9,000 an acre. Pasture values in the south west rose by 6.6 per cent to £8,000, despite the well-publicised difficulties in the dairy and beef industries, while in the south east they also achieved that figure although it represented nil growth.
Virtually everywhere, buyers continue to show a balance between farmers, keen to purchase land in close proximity to their existing holdings, and non-farming individuals with specific, largely lifestyle but also tax-driven, reasons for their purchase.
Farmers will always seek additional land when it comes up next door and / or they are rolling over the proceeds from development land sales for Capital Gains Tax (CGT) purposes. There are clear signs that new development is gathering pace to meet the increased demand for housing particularly in the south-east. Developers have not been able to deliver sufficient housing and are coming under pressure from Central Government to do so and are now responding positively.
Non-farming individuals are attracted to land ownership based primarily upon the well-known tax benefits - a purchase can help utilise CGT relief and may also bring benefits with regard to Inheritance Tax (IHT).