Britain’s estate and farms market is experiencing a shortage of supply in stock as sellers are reluctant to move due to fears over future Brexit effects.
The analysis by real estate firm Knight Frank suggested that many of the estates that had been on the market for quite some time have now been sold as buyers have gotten their head around the Brexit situation.
Sellers, on the other hand, seem to be a bit more cautious. The study showed that vendors only sell their property if they have to, and whilst Brexit may be an issue, the way bigger issue is the lack in supply that’s created through this.
Clive Hopkins, head of farms and estates at Knight Frank, explained:
“Looking forward it is hard to predict the longer term impact of Brexit. The real issue that will affect values is supply. Although most farmers I speak to have come to terms with the fact that by 2020 agricultural subsidies will be much diminished, I do expect that more of them will decide to call it a day in the coming years.”
“I think the market will stand a limited increase in the number of farms for sale, in fact prices could be higher for those that bring their units to the market early, but if interest rates rise hastening the trend, prices will start to suffer,” he added.
“We won’t see the huge drops experienced in Ireland following the financial crisis, but it’s not inconceivable that average values could settle at around £6,500 per acre until supply and demand comes back into balance. After that I think we will see prices begin to increase steadily again,” he pointed out.
Overall, the appetite for farms still seems to be strong, especially in Scotland where the market remained fairly resilient in 2016 despite the Brexit vote.
Tom Stewart-Moore, a member of Knight Frank’s Scotland farm sales team explained that they expect “large, well-equipped farms to continue to sell well”. Before saying that the biggest challenge remains pricing a property correctly as the market is very price sensitive.