Farm Ireland

Thursday 22 March 2018

Uncertainty over the future of farming subsidies hits UK land values

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Rhiannon Curry

The value of British farmland fell by more than 8pc last year on fears subsidies will fall away after Brexit, according to the latest figures.

Rural land was worth around £8,972 (€10,257) per acre at the end of December, ­dropping from £9,778 (€11,178) at the same point a year previously, research by property ­consultancy Carter Jonas found.

However, over the next 12 months the price is expected to rebound slightly across the UK, except in the south east where it will take longer to improve.

Tim Jones, the head of rural at Carter ­Jonas, said: “The ongoing Brexit ­negotiations mean that the outlook for rural property will remain uncertain, however, the release of the UK’s ­agricultural bill this year will be an ­opportunity to clarify key issues, ­including farming productivity and ­environmental enhancements”.

This, he suggested, would help to restore confidence to the market generally and particularly to existing and future rural landowners, potentially increasing sales and improving prices. Selling land for development has been a useful way for farmers to generate more money.

What support payments will be available to farmers will continue to be a central ­issue in the Brexit negotiations, particularly the subsidies which will be made available after the UK leaves the bloc.

Michael Gove, the Environment Secretary, told farmers earlier this month that the Government would guarantee ­subsidies at the current EU level until the 2022 election, after which there would be a “transitional period” to a new system.

Across the whole of the property sector, Carter Jonas said that returns will be 4.6pc this year, which is an improvement on the 3.6pc achieved in 2017 but way below the highs of 15.2pc seen in 2015.

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Office property is likely to face price falls this year as a less certain economic climate puts increased pressure on rents.

Retail property in particular is expected to underperform the market, the report found, as the poor performance of the high street and the increasing popularity of online shopping continues to hit values.

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