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Rural land prices set to fall during Brexit negotiations - RICS

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Demand for farmland in Scotland has further decreased, having now been declining for the last 24 months, according to the latest RICS / RAU Rural Land Market Survey.

Respondents are highlighting uncertainty over Brexit and insecurities over future subsidies, as well as low commodity prices as the key factors hindering the market.

The slowing of the market is also predicted to lead to a decline in prices over the next 12 months, according to respondents.

Survey respondent George Hipwell MRICS, of Davidson & Robertson Rural, Bathgate, said: “Quality has, and will continue to be the main factor driving values with regional variations due to influences such as the strength of neighbouring agricultural businesses, land quality and level of fixed equipment. Fluctuating commodity prices, reducing subsidy levels, and the UK’s removal from the EU mean the viability of agri-businesses will become increasingly important and as such marginal properties may need to be realistic in order to achieve a sale.”

Harry Lukas MRICS of, CKD Galbraith in Galashiels, said: “Some farms have been slower to sell in the Borders in the last six months, buyer enthusiasm dampened by CAP problems on top of lower stock and commodity prices. Underlying demand is still in evidence for good holdings.

RICS laid out the priority areas for rural surveyors and land agents ahead of the EU negotiations, and the role that farming and land management will have in a post-Brexit economy.

RICS said the forthcoming move away from the Common Agriculture Policy gives an opportunity to reset the British agriculture and environmental policy framework.

It called for:

UK

  • Government to guarantee funding of targeted direct financial support beyond 2020 where it is required and provide an availability guarantee of labour

  • To enhance funding immediately for UK applied agricultural and horticultural research and agri-tech development.

  • Government to “rural proof” all national polices, recognise the highly diverse nature of rural land-based businesses and ensure rural development funding is available to support and develop the establishment and growth of rural businesses post Brexit

    • Scotland

    • Government to ensure continued investment in infrastructure projects in rural and remote Scotland, with an emphasis on delivery of transport solutions, energy infrastructure and broadband connectivity.

    • Government to deliver a coherent forestry and woodland strategy for Scottish timber to capitalise on domestic opportunities within the construction sector and export opportunities.

    • RICS calls on Government to review the current renewable energy framework in Scotland (production and distribution). This is to include rating, subsidy and planning to ensure it is fit for purpose to deliver energy requirements and Government climate change targets.

      • RICS Policy Manager in Scotland, Hew Edgar, said: “Any decrease in the overall level of funding for agriculture, the environment and rural development post 2020 could have significant impacts on the rural economy and there is currently little belief amongst those likely to be impacted that current payment levels will be maintained post 2020. Furthermore, any loss of access to the single market and restrictions on freedom of movement of labour will also impact land based businesses. Imposition of tariffs, for example, on Scotland’s beef and lamb exports will affect profitability of the sector. However, amongst all the uncertainty and the challenges ahead, change presents opportunity. A targeted rural development policy to assist Scotland’s myriad of land based businesses become multi-functional enterprises which can capitalise on Scotland’s natural resources, heritage and landscape will be essential post Brexit.”

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