A&N Estates reports strong market activity

This year has been challenging for landowners and tenants in the rural sector. Just like other parts of the economy, participants in the rural economy can be deterred from making decisions by uncertainties and as we started 2015 we were faced with 3 in particular; the effects of forthcoming changes to the Common Agricultural Policy (CAP), the Scottish Government’s review of landholding in the form of the Land Reform Group and the introduction of the Land and Buildings Transactions Tax (LBTT) on 1st April 2015. On top of that there was a General Election to contend with. Gaining some degree of certainty in any of these areas and being able to advise clients understandably seeking to minimise risk in their decision making process has been extremely challenging for professional advisors.
 
At Aberdeen and Northern (Estates) we have been pleased with the continuing success we have had across all of our business streams, from agency commissions to valuation instructions and compulsory purchase advice. Commonly, the active rural land and property selling season is the spring and summer months, however we have been highly visible from the first few months of 2015 and have sold or put under offer 20 equipped farms and bare land or woodland opportunities. These numbers reveal the continued interest in farmland located in the north and north east of Scotland from prospective purchasers and our position as the leading provider of rural agency in the region.
 
Activity to date has included the sale of Burnthill and Little Burnthill Farms, Fraserburgh, which went to a successful closing date and yielded a number of competing offers. We also saw significant interest in another unit we brought to the market early in the year, Mains of Rainnieston near Udny, comprising of 289 acres of grade 3(1) arable land. This was under offer within the space of one week of entering the market.  A similar scenario with strong demand was evident with 84 acres of bare land recently brought to the market at Jericho, Culsalmond.
Another sought-after property, Bridgefoot Farm, Udny, a 111 acre farm property comprising an attractive three bedroom farmhouse and good range of farm buildings in close proximity to Aberdeen is also under offer after being marketed at offers over £675,000. Meanwhile West Cairncake near Cuminestown, Turriff, an agricultural engineers business and residential property with land, had received an acceptable offer within two weeks of being placed on the market for sale. 
 
Given our activity in the market we are constantly being approached from interested parties looking to purchase or let farmland. The interest we have found is at odds with some reports of a quiet farmland market. The uncertainties over CAP reform and land reform proposals being promoted by the Scottish Government have not dampened activity from prospective purchasers in well marketed units and we are encouraged by this as we press on into the second half of the year. Indeed, the LBTT might have accelerated some transactions to settle prior to the effective date of 1st April, but it has not deterred buyers since then either.
 
We remain of the view that as long as North and North East land is perceived as offering better value for money than other parts of Scotland, England, Ireland or Wales, the market will continue to attract good interest from both locals and others from further afield as buyers predict continued capital growth and feel cushioned by the present low cost of borrowing. Neighbouring farmers are keen not to miss out on an often once in a generation opportunity of securing adjacent land to existing holdings so will often move quickly when land comes up for sale. We would encourage prospective vendors who are considering the sale of their property but are concerned at the impact of the current uncertainties in the market to have a discussion with us as soon as possible and we will be able to advise on the best strategy to achieve the ultimate aim of the client. 
 
With continued healthy activity in our agency sector we are also finding an increase in the number of valuation instructions. These are generally instructed by solicitors and accountants advising clients on probate issues or tax planning. In addition, some larger landowners are carrying out option appraisals on their assets and this prudent behaviour has been driven by the ongoing uncertainties, with landowners seeking advice on alternative uses for their assets and considering the impact that forthcoming changes may make to both the value of their asset base and the way that it is being managed.  
 
Our commercial business has seen renewed interest from tenants considering relocating away from comparatively expensive properties in Aberdeen, and its immediate periphery, to the Shire where we have been marketing a number of well specified commercial units. We found particularly strong interest in those units located close to a good road network. This renewed interest in locations away from Aberdeen and its periphery, but within easy access of it, has been driven in the main by the dramatic fall in the price of a barrel of crude with the consequence of businesses connected to the oil industry looking closely at costs and seeking to reduce overheads. Significant costs include the rental outlay on property and these can be considerably less if occupiers accept a modest additional journey time from their current location.
 
We are looking forward to how the rest of the year progresses. The rural sector undoubtedly faces a challenging time ahead and it has never been more important for landowners and tenants to consider the consequences of not embracing change, even if some of it is being implemented without choice. Rural businesses would be advised to also look at diversification if they have not already done so, any member of the Estates team or the wider ANM Group would be happy to assist where possible. We are conveniently based at the Thainstone Centre, Inverurie, and the team will also be hitting the road this summer, attending several agricultural shows throughout the North and North East of Scotland. We look forward to seeing you at these!

 

Aberdeen and Northern Estates

Aberdeen & Northern Estates is a highly experienced and multi-disciplined chartered surveying firm providing a comprehensive range of professional property services throughout North and North East Scotland.

We are the premier property specialists in the North and North East of Scotland and the company has gained considerable market experience as well as the local knowledge and professional competence to achieve a successful result.

Our Services

Aberdeen and Northern Estates offer a large range of land based services including: