Tag Archives: agriculture
UK farmland values down 3% in first quarter of 2016
As uncertainty around the UK referendum on the country’s future in the European Union grows, values for farmland fell by 3% in the first quarter of 2016, dropping back below £8,000 an acre. The drop was the largest quarterly since the 5% decrease that occurred following the collapse of Lehman Brothers in the fourth quarter of 2008, according to the latest analysis report from real estate firm Knight Frank. It shows that around 25% fewer acres of farmland had been advertised by the end of March, compared with the same period in 2015. However, despite the uncertainty and value drop, a recent survey by Farmers Weekly shows that 60% of farmers will be voting to leave the EU on 23 June. The report also looks at what has happened to farmland prices since the UK joined what was known as the European Economic Community (EEC) in 1973. Data from the Ministry of Agriculture/DEFRA shows land values increased sharply around the time, even managing to beat the hyper-inflation of the 1970s. Over the long term that trend has continued with land values outpacing inflation. But the sobering trend for farmers is how agricultural commodity prices have failed to keep up. The report also points out that investors’ priorities have changed dramatically over the past year, as they are now looking much further afield and for value-add opportunities such as diversified income streams or development potential And it also shows that prime country house prices rose by 0.3% on average in the first quarter of 2016, taking annual growth to 2.4%, down from 5.2% in 2014 but there was a notable rise in activity in the first quarter of the year with Knight Frank figures showing a 24% rise in sales volumes across the prime country market, compared with the same period in 2015. Activity was focused on the sub-£1 million market, which showed strongest price growth of 4% across the last 12 months. Homes worth £5 million or more saw values fall by 2.7% in the same period. ‘From weighing up the hugely complex issues surrounding the EU referendum, to coping with a slump in agricultural commodity prices and working out what the implications of the latest changes to the planning system could be for them, estates, farms and other rural businesses are having to take some extremely big decisions,’ said Andrew Shirley, head of rural research at Knight Frank. ‘Long term strategic planning can be extremely helpful when it comes to coping with such challenges and there are also exciting opportunities to be grasped and the level of innovation and entrepreneurship in the countryside has never been greater,’ he added. According to James Del Mar, Knight Frank’s head of rural consultancy, the tax environment for the rural landowner in the UK is becoming more challenging, particularly for those who are domiciled elsewhere. ‘At the same time, the pent up demand for new housing and infrastructure, combined with changes to the planning system, presents what some… Continue reading
Global business putting investment in UK commercial property on hold due to Brexit concerns
International businesses are postponing investment in the UK in the wake of uncertainty about the country’s membership of the European Union ahead of a referendum in June. The latest UK Commercial Market Survey from the Royal Institution of Chartered Surveyors (RICS) indicates that demand for UK commercial property among international investors has stalled. It says that short term uncertainty has contributed particularly to falling international investment demand in central London and rental and capital value projections have been scaled back since the announcement last year that a referendum would be held. On top of this only 6% of the RICS survey respondents believe that Brexit, the term given to a UK decision to leave, will have positive impact on the country’s commercial property sector The demand indicator among international investors for UK commercial property is now at its lowest level since RICS records began in 2014 with just 5% of members surveyed reporting increased interest from overseas companies over the last three months. This is a considerable drop from 36% in the second quarter of 2015 Uncertainty caused by the EU referendum has been cited by 38% of RICS members working within the sector as the reason why major international retailers and other businesses have been nervous of investing in Britain. Should Britain leave the EU, some 43% of respondents feel that it would have a negative impact on the commercial property sector and only 6% said a Brexit scenario would have a positive impact on the commercial property sector. RICS says that some international firms are drawing up contingency plans to shift their headquarters in the event of Brexit. Overseas firms based in the UK occupy large swathes of real estate, and their departure could harm office occupancy rates, and the local economy. Likely beneficiaries of a Brexit are Paris, Frankfurt and Dublin, although the report said London was likely to remain a magnet for investment. The report points out that while investment rates have eased, they are not frozen. ‘There is no doubt that since the EU referendum became a certainty following the general election last May we have seen a decline in interest from overseas investors in UK commercial property,’ said RICS chief economist Simon Rubinsohn. ‘At least in the short term, we know that international retailer and service providers are finding the UK market less attractive,’ he added. The report also suggested that British farmers, many of which rely on payments from the EU’s Common Agricultural Policy to pay their rents, would take a big hit if the UK leaves the EU. The RICS EU Referendum Paper shows that a range of key industries from residential housing to construction and rural have been hit by short term uncertainty. However, across the board, in the longer term steady growth is still predicted across rural, land and built environment sectors. It suggests that in the event of Brexit, farmers will most likely lose access to the EU single market and CAP. The question… Continue reading
Irish property market recovery leads to boost in planning applications granted
In yet another sign that the residential property market in Ireland is recovering, planning permission for new dwellings increased by over 95% in the final quarter of 2015. The data from the Central Statistics Office show 4,017 applications were permitted compared with 2,057 units for the same period in 2014, an increase of 95.3%. A breakdown of the figures shows that the permissions were granted for 2,754 houses in the fourth quarter of 2015 and 1,905 in the fourth quarter of 2014, an increase of 44.6%. In terms of apartments some 1,263 units were granted compared with 152 units for the same period in 2014, an increase of 730.9%. One off houses accounted for 22.7% of all new planning permissions granted in the final quarter of 2015, the data also shows. The total number of planning permissions granted for all developments was 4,470. This compares with 3,504 in the fourth quarter of 2014, an increase of 27.6%. Total floor area planned was 1,468 thousand square metres in the fourth quarter of 2015. Of this some 40.9% was for new dwellings, 46.8% for other new constructions and 12.3% for extensions. The total floor area planned increased by 94.7% in comparison with the same quarter in 2014. Planning Permissions for new buildings for Agriculture increased to 420 on the quarter compared to 165 permissions in the same quarter of 2014. Continue reading
