Carter Jonas
Carter Jonas

Tight supply driving off-market success

Off-market land sales and purchases are gaining popularity due to a tightening of supply of good quality farmland, particularly arable, and the continuing strong desire among wealthy individuals to own it.

While confidentiality remains the key driver, off-market sales can offer a commercial advantage to buyers and improve the negotiating power of sellers.

Off-market sales now account for about a third of Carter Jonas land transactions.

Farmers Weekly’s Land Tracker shows the area of open market sales has fallen about 15%, suggesting only about 110,000 acres were publicly marketed in 2014.

With land supply so tight, buying agents, once a feature of the country house and high-end residential market, are now seeking out private deals for their clients, who pay a significant premium off-market to secure a suitable property.

Some top-end buyers are looking at 50-100 years’ ownership. They view land as a safe, secure asset with significant taxation advantages, with the possibility that even a limited development opportunity will deliver a quantum leap in asset value.

Private sales and purchases will continue to increase. High net worth

individuals demanding privacy have greater access to funds, unlike the average buyer reliant on high-street banks who is becoming squeezed.

In addition, a lot of farmers are seeing their cash flows tighten, which has not escaped the banks. This is leading to additional caution when the neighbouring block of land comes to the market from lenders even if the sentiment is not shared by the farmer looking to secure lower fixed costs by spreading the cost over a larger area.

The essential elements to success in the off-market arena are a thorough knowledge of the market and a good client / agent relationship. The latter aspect has a further key element – the agent’s contacts with potential buyers or where acting on behalf of the buyer detailed information of what’s available off-market nationally as well as regionally that will interest the buyer. Privacy is arguably of more importance for buyers who will not want their activities widely known and pushing up prices as a result.

For sellers, the initial confidentiality means knowledge of the land’s availability is kept away from the open market. The placing of the property on the open market would then be as if it were fresh to the market, resulting in every possibility of a strong price still being achieved.

Richard Liddiard

Richard Liddiard

Partner

Richard is based in Newbury where he advises clients throughout the region on rural matters but specialising in farm agency/buying and family farming structures where he is a trusted external advi...

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