If I had started to write this article last week, as I probably should have done, I would have been saying that the rural property market remains fairly steady, with some residential property sitting on the books for a while before finding the right buyer. In some ways this is still true but the last ten days have seen a real flurry of activity with viewings booked all over the weekend and this week starting in the same vein. So what has changed?
The properties are still the same, the prices are still the same and interest rates haven’t altered in the last few days. In rural property we used to be able to predict the busy times – often directly after New Year when future resolutions have been agreed or after the summer holidays when Mum has time to get back onto Rightmove looking for the perfect property. But this is no longer the case and often we can neither predict nor explain spikes in interest.
When it comes to land we are finding a similar trend, if you can call it that. Smaller blocks of land are either sitting on the market for months or flying off the shelf with multiple potential buyers. Even the smallest blocks of land on the outskirts of rural villages are experiencing high demand with locals wanting amenity land close to home. The market for good quality farm land remains high and even land which has been poorly managed over recent years is selling, particularly if the neighbouring farmer is looking to gain control of boundaries or access points.
However, we are also seeing a slight increase in land sales being forced by lenders, typically the Bank – a situation which surely any farmer seeks to avoid and historically farmers tend to shy away from selling assets, even when the future of farm is potentially at stake. As a Succession Planning specialist my focus is nearly always on planning for the future and so many families I work with refuse to entertain the idea of selling anything, however dire the situation they find themselves in. But is this the right thing to do? The whole point about Succession Planning is to make a sustainable and workable plan which meets the family’s objectives for the future and this usually involves ensuring there is a viable business for family members to take over. If the borrowing-to-asset ratio is too high then there is generally only one outcome – either sell up or go bust, neither of which are attractive prospects. So many families refuse to address the problem, put their heads down and carry on as before in the hope that something will change. Sadly, unless we have a stroke of luck, in order for something to change, WE have to change something and change, as we all know, can be daunting. But change we must if we are to survive, particularly with the uncertainty of Brexit looming. As a Nation we need to protect our ability to compete in world food markets and in order to do that we must protect our agricultural industry.
If it feels like I am constantly banging the Succession Planning drum then good, because I am! We have to plan for the future because if we don’t it will be upon us and we won’t be ready. Plans take time to develop, agree and implement and none of it can be done overnight. The plan has to be agreed and sustainable in order to be effective but most importantly it has to be flexible as unforeseen internal and external pressures can affect it constantly. But there needs to be a plan and it starts with a conversation about the needs and wants of all the stakeholders of the family farm. As a business woman I am trained to provide answers to problems, but as a Mediator the approach is very different. We listen, probe and tease out thoughts, feelings and desires to guide the family towards a plan which is totally specific and appropriate for them. It can be exhausting and emotional but it can also be exciting and energising and many families find that, when carefully managed, the process brings them closer together, not further apart.
Louise Taylor MA, MSc is a Partner in Barbers Rural and Managing Director of Taylor Millbrook. She is an RICS Accredited Facilitative Mediator and specialises in Succession Planning.