Price of Farmland

Pilatus · Jul 22, 2020

Martin Holden said:
Was it Danes that bought Lowesmoot Farm then?

Yes Troels Povlsen the father of Anders Polvsen.

fgc325j · Jul 22, 2020

jackrussell101 said:
Land would yield around 1-2% return on investment around the West Midlands... just for renting it out... let alone farming it... so that is a 10 times better return on investment than UK government bonds at present...

There is always a BUT - with land you have to spend money to maintain it, there is another thread here where some body mentions
about the amount of land not being "properly farmed", and being allowed to degenerate. With bonds there are no "maintenance costs",
you do not need to spend money on lime, ferteliser, fencing, cost of keeping animals, growing crops etc, and you definitely do not need to be
on first name terms with machinery reps

teslacoils · Jul 22, 2020

It's stamp duty that is the brake for land purchases.

ollie989898 · Jul 22, 2020

teslacoils said:
Those who pay inheritance tax have either died unexpectedly, or not taken decent advice. You don't need a field to do it, and in any case a field would be exempt as business property. Apr is essentially just for the farm house.

The tax should be done away with. At present none of the rich pay a cent because they can afford legions of accountants and enter into all kinds of schemes. Meanwhile the poor bloke whose worked all his life just to own a house has his kids smashed by IHT merely by having the misfortune to die? It's a joke tax devised by government to slap another tax on the people who can least afford it whilst as usual, the wealthy pay fudge all.

jackrussell101 · Jul 22, 2020

ollie989898 said:
The tax should be done away with. At present none of the rich pay a cent because they can afford legions of accountants and enter into all kinds of schemes. Meanwhile the poor bloke whose worked all his life just to own a house has his kids smashed by IHT merely by having the misfortune to die? It's a joke tax devised by government to slap another tax on the people who can least afford it whilst as usual, the wealthy pay fudge all.

ollie989898 · Jul 22, 2020

Dave645 said:
I hold my breath about what is to follow the new shift in farming sub, my gut says this cap they have triggered is going to continue, so even if subs in one form or another the large payments may not continue.
What that means for land prices is anyone’s guess but if it means the big farms getting split up and rented land being dropped, then as the big players don’t want it my guess is the smaller farmers will but at less rent cost, but if no one wants to rent or buy prices will fall.
It will come down to what’s the governments goal, if they want new farmers new entrants then this is a way to do it, cap the max payment and let land prices fall where they may, to generational farmers it matters not a jot how low land prices go because land is their living, they will hold it regardless. To investors they may get cold feet they may not, but a shift in IHT may force them out, and that leaves a lot of land on the market I see the government buying it and setting up a lot of small holdings.

getting back to he current system £3 billion supporting about 138,000 farmers not all will be claiming but that’s the number, it sounds great but actually about 10% of the farmers get 90% of that £3 billion
So unlike if it was shared equally and we all got £21 k each that’s very generous for the tiny farmers not at all for the big.
We have now about 1380 farmers getting about £2 million each. The other 136620 farmers averaging only £2000 while this is not accurate and farm size moves these numbers about we can see that the system is broken. We are giving massive amounts of tax payers money to already wealthy people or companies.

What’s realistic they cap sub and let land prices fall and setup new farmers, so get more people and families back on the land or more of the same we have already seen?
Buy just capping it at £100,000 at saves them 1380 Farmers getting the average of 2 million each Saving 1.9 million each so saving tax payers £2.62 billion slashing support to farming to only £400,000,000 What’s likely in your eyes?

if they really wanted to get new entrants then just averaging it out so the £21k number it helps the small grow Massively and Existing Bigger farmers with a token amount to live on. I also see a drop in production happening at the same time as all this pain which can encourage prices to lift Or At least stabilise them, local supply Always help underpin local prices.
If small farmers where getting £21k sub that drives them to expand and rent land buy tackle to expand with but it stops that top 10% getting richer on tax payers money. If they are so profitable These big farms then they will survive with just that £21k
But my vote goes to a cap and a shift to support for new entrants and small farms this slashes the support budget By 2 thirds To under £1 billion. It’s a no brainer. Anyone that thinks differently is deluding themselves.

Define a small farmer? I don't believe the scheme is designed to help young/new entrants any more. In fact, I don't think the government give a fudge and haven't for some years- they were obliged to pay the money because of EU rules and so they have shifted the goal posts to get something tangible out of it, it just so happened their environmental policies were a shower.

The fact of the matter is huge sums of money as a reward for owning land is a nonsense. If you want to support farmers on the marshes or in the uplands because they support specific habitats as a by product for what they do then fine, these folk can individually apply and be paid any amount of money if they are willing to do what the clipboards deem a good idea but being paid merely because you have 4000 acres of Salisbury plain and grow wheat on it is a nonsense.

If production drops, that is no bad thing either in my view as it only aids the remaining players in the game. If people sell up or rent out again newer entrants can have a go or nearby businesses can expand.

People are quick to claim- 'ah but the ancillary trades will be affected'- these trades have been consolidating for years and whilst the forum likes to have fun at Clive and Co because of the rise of direct drilling and fudge all input spend ultimately the industry is moving that way anyway. Look at the number of threads here demonstrating a steady redirect in the thinking of producers across all the sectors? I can't keep up with them all; lots of new ideas are being tried, discussed or torn apart all with the aim of making people more money whilst taking up less of their time.

Who here honestly believes machinery, steel, diesel or labour are going to cease their rise in cost? People rightly point out that prices are largely the same at in 1970 so it's obvious the cost of the product isn't going to significantly change barring some global locust plague . You can only conclude that the industry at large will gradually shift in practice and methods and the old ones will be looked back as impractical or uneconomic, just as we look at churns, 50kg sacks of fert and zig-zag harrows today- worked at the time but just not valid any more.

With the above in mind, the industry is going to see a new phase in it's history I think over the coming decades whether subsidies are paid or not. Innovation or just externally-driven change in the arable world is being mirrored in the livestock sectors; just as an example agrochemicals are being lost or curtailed whilst wormers and antibiotics are receiving increasing scrutiny from a range of different stakeholders. In some ways the industry I feel has an exciting challenge ahead of it as it shakes itself out of the 1990's end of session hangover and steers in a direction where it produces smarter instead of the past's near mandatory self-flagellation with respect to the environment, animal welfare, producers' wallets or their lifestyles.

teslacoils · Jul 22, 2020

ollie989898 said:
The tax should be done away with. At present none of the rich pay a cent because they can afford legions of accountants and enter into all kinds of schemes. Meanwhile the poor bloke whose worked all his life just to own a house has his kids smashed by IHT merely by having the misfortune to die? It's a joke tax devised by government to slap another tax on the people who can least afford it whilst as usual, the wealthy pay fudge all.

Not at all. Currently there is zero incentive to invest in anything but ones own house. Now they want to be able to pass their house on when they die, but not pay care home fees. Total lack of balance.

jackrussell101 · Jul 22, 2020

''A society grows great when old men plant trees whose shade they know they shall never sit in'' - Greek proverb

ollie989898 · Jul 22, 2020

teslacoils said:
Not at all. Currently there is zero incentive to invest in anything but ones own house. Now they want to be able to pass their house on when they die, but not pay care home fees. Total lack of balance.

The care home and social care 'industries' to my mind are borderline dubious.

The vast majority of working people I would suggest have fudge all money to invest in anything besides a house and pension.

Martin Holden · Jul 22, 2020

MX7 said:
Yes Troels Povlsen the father of Anders Polvsen.

Do you know what Adrian and Michael are doing now? I heard the Michael was going to keep some Herefords on his son in law‘s place? I was a pre college student there back in 75/76

Martin Holden · Jul 22, 2020

teslacoils said:
Not at all. Currently there is zero incentive to invest in anything but ones own house. Now they want to be able to pass their house on when they die, but not pay care home fees. Total lack of balance.

Aha, you’ve just discovered UK Politics. No long term plan! Live for the here and now! That’s why investing in the UK is perhaps seen as a risky business. If we want to re build or should I say re shape the UK economy, then the dimbos in Westminster need to think like that Japanese - long term

andybk · Jul 22, 2020

Dave645 said:
What’s realistic they cap sub and let land prices fall and setup new farmers, so get more people and families back on the land or more of the same we have already seen?
Buy just capping it at £100,000 at saves them 1380 Farmers getting the average of 2 million each Saving 1.9 million each so saving tax payers £2.62 billion slashing support to farming to only £400,000,000 What’s likely in your eyes?

if they really wanted to get new entrants then just averaging it out so the £21k number it helps the small grow Massively and Existing Bigger farmers with a token amount to live on. I also see a drop in production happening at the same time as all this pain which can encourage prices to lift Or At least stabilise them, local supply Always help underpin local prices.
If small farmers where getting £21k sub that drives them to expand and rent land buy tackle to expand with but it stops that top 10% getting richer on tax payers money. If they are so profitable These big farms then they will survive with just that £21k
But my vote goes to a cap and a shift to support for new entrants and small farms this slashes the support budget By 2 thirds To under £1 billion. It’s a no brainer. Anyone that thinks differently is deluding themselves.

I totally agree with the sentiments of your post and would be a good outcome , but can you honestly see savills the land other agents letting them get away with that ? be massive lobbying of mps and civil service grandees around the shoots next winter to get rid of that . thats their bread and butter

Tarw Coch · Jul 22, 2020

teslacoils said:
It's stamp duty that is the brake for land purchases.

You can not be serious, I’ve just bought some land next door and the stamp duty is next thing to bugger all in comparison to the purchase price

teslacoils · Jul 22, 2020

Took me four years to pay the stamp duty on mine. It's a major disincentive for investment purchases if you're already 5 percent down on day one. This may be a good or bad thing. But it certainly is a consideration. I'd warrant the govt makes more in stamp duty from ag sales than it looses from the difference between Apr and bpr. At 5 percent, it's certainly a factor when comparing land to bond yields. But anyway, negative interest rates soon .....

ollie989898 · Jul 22, 2020

teslacoils said:
Took me four years to pay the stamp duty on mine. It's a major disincentive for investment purchases if you're already 5 percent down on day one. This may be a good or bad thing. But it certainly is a consideration. I'd warrant the govt makes more in stamp duty from ag sales than it looses from the difference between Apr and bpr. At 5 percent, it's certainly a factor when comparing land to bond yields. But anyway, negative interest rates soon .....

It's clearly designed as a 'we will have some of that money you are transferring about, thank you' type tax. I'm all in favour of abolishing such taxes entirely, provided alternatives are suggested that introduce tax in the right areas, fairly and which provide the necessary revenue for the appropriate level of public spending.

glasshouse · Jul 22, 2020

No wot said:
Agricultural was on its knees between 1920 & 1939 , cheap food was what the Government's wanted , WW2 saved UK farming right up to joining the EU , which then gave UK farmers a very safe trading environment for 40 yrs , they say history repeats it self , fasten you seatbelts

The uk govt introduced a floor price for wheat
In 1932 after the collapse of 1931
The 1931 collapse came about after stalin flooded the world wheat market, while deliberately starving his own people.

glasshouse · Jul 22, 2020

teslacoils said:
Took me four years to pay the stamp duty on mine. It's a major disincentive for investment purchases if you're already 5 percent down on day one. This may be a good or bad thing. But it certainly is a consideration. I'd warrant the govt makes more in stamp duty from ag sales than it looses from the difference between Apr and bpr. At 5 percent, it's certainly a factor when comparing land to bond yields. But anyway, negative interest rates soon .....

Stamp duty should be paid by the seller, who is the party ”in funds”
Better to abolish it and replace with an annual tax

glasshouse · Jul 22, 2020

mountfarm said:
Two units recently released privately to a select few for tender bids. 105 acres with a average house and buildings £2.2 million or above via private tender, and 140 acres with a decent house and a variety of buildings £3 million asking price. These went on the market 4 weeks ago and have sold according to the respective agents, although prices not disclosed. I can’t say Area as it was specifically not to be made common knowledge on both accounts.

Released by who?

Tarw Coch · Jul 22, 2020

glasshouse said:
Stamp duty should be paid by the seller, who is the party ”in funds”
Better to abolish it and replace with an annual tax

There’s a good chance the seller will be paying capital gains tax and that’s likely to be a lot more than stamp duty

unlacedgecko · Jul 22, 2020

jendan said:
I thought Lincolnshire was all flat and didnt have any trees?

Plenty of bits you can’t put a tractor over for fückwits like me to chase sheep around.

Price of Farmland

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0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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