Land prices

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Land prices
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Units used

• Hectares or acres ?
• Land still sold in acres
• 1 hectare 2.471 acres
• 1acre 0.4047 hectares

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Source of information on land prices

• The Farmland Market
• Oxford Institute series
• Inland Revenue series
• DEFRA (England only)
• Source - Valuation Office Agency
• http//www.defra.gov.uk/esg/default.htm

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Oxford Institute series

• Yearly average of land sold at auction
• Source
• Estates Gazette
• Farmers Weekly
• Overestimates the price of land

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Inland Revenue

• Details of all sales of agricultural land are
  required to be notified to the Inland Revenue
  under Authority of the Finance Act 1931, as
  amended by the Land Commission Act 1967 and
  section 89 of the Finance Act 1985.

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Inland Revenue series

• Information on all land sales over 5 hectares
• Reported price excludes Legal Fees and Stamp Duty
• Requirement to pay Stamp Duty
• 9 month time lag in information

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Inland Revenue series

• Land included
• sales of agricultural land which may, in the
  purchasers view, have an element of future
  development value
• sales where the vendor retains certain rights
  over the land, e.g. sporting
• sales of agricultural land, generally small
  areas, in which the value of the farm dwelling
  represents a substantial part of the total
• land sold for afforestation purposes

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Inland Revenue series

• Land excluded
• sales of agricultural land for development and
  other non-agricultural purposes e.g. gravel
  workings
• gifts and inheritances.
• THIS MAY BE LIABLE TO STAMP DUTY

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Stamp Duty

• Oldest tax administered by the Board of Inland
  Revenue
• Raises 3.8 billion annually for Treasury

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Stamp Duty Disadvantaged Areas Relief

• Property, or land, has to have been located in a
  qualifying ward/sector
• Qualifying date published
• http//www.inlandrevenue.gov.uk/so/pcode_search.ht
  m

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Stamp duty rates
N.B. Disadvantaged Area Relief for
non-residential land transactions is not
available for non-residential land transactions
with an effective date on or after 17 March 2005.
Purchaser pays Stamp Duty
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Land price in England
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Land price England (based on 1995 prices)
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Land sales in England
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Area land sold
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Area land sold - England
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Influence diagram for land prices
Supply of land
Agricultural output x type of farm
Agricultural prices
Farm income x type of farm
Environmental concerns Planning regulations

• Agricultural land prices
• Land type
• Farm type
• Tenancy
• Region

CAP Euro Set aside
Housing market
Who buys land
Financing arrangements
Tax regulations Rollover relief
Returns from alternative investments
Interest rates
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Factors that affect the price of land at a given
time

• Grade of land
• Tenure
• Size of parcel of land
• Farm or bare land
• Milk/sheep/beef quota
• Potential for development

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Land sales England by tenure
Vacant possession premium
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Vacant possession

• Premium over tenanted land
• Owner has total enjoyment of land
• Vacant possession premium
• Less so in recent years due to market uncertainty

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Size of parcel of land

• Smaller parcels make higher price
• Greater proportional value of farmhouse
• Greater demand for smaller parcels
• Less total amount of money required

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Average size parcel sold
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Land sales England by size group
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Land sales England by size group area
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Land sales England by land type
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Land sales England by land grade
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Agricultural land sales in England, by Government
Office Region
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Land sales England by vendor type
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Land sales England by purchaser type
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Movement of land 1993-2001
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Interest rate vs area land sold
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European land prices
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European land prices

• More paid for better quality land in good
  economies
• Poor quality land same price
• Price variability
• Supply and Demand affects price