Land Is Hot!
Gideon Sumption of Stacks Property Search says: “If you think that those who bought London property a decade ago are congratulating themselves, then consider for a moment those that chose a much less urban haven for the money,”
An acre of prime pastureland now costs well in excess of £7,000 with farmers regularly entering bidding competition for blocks of land around 150 acres. And for home owners and buyers who want a few acres for lifestyle reasons, the knock on effect is considerable.
During the recession, demand for properties with around 5-10 acres of recreational land fell as buyers chose properties that provided similar accommodation without the premium a package of land added to the cost. Financial concerns led to a trend for buyers dispensing with the nice but unnecessary bells and whistles.
But as the economy and property market recovers, land is once again in demand. The difference in the west country between a 5 bedroom farmhouse with five acres, and a similar farmhouse with one acre, is around £250,000. You don't have to be Rachel Riley to recognise that small blocks of 'lifestyle' land, adjacent to a good property, has a value far in excess of the average price of UK land.
Five acres is the golden number when it comes to property. It's enough, but not too much. And the rationale for purchase goes way beyond yield, or usefulness. It clearly makes no financial sense to spend upwards of £200,000 to keep a couple of ponies, or a few chickens. But land provides home owners with security and reassurance. If you own it, nobody can build on it, or install a crop of solar panels; it offers privacy; and it represents an excellent investment that requires much less in the way of maintenance, upkeep and outgoings than a two bedroom flat in Chelsea.
If you're a homeowner wanting to add some land to your property, or a buyer seeking to simultaneously buy some adjacent land, don't expect the land owner you're approaching to be ignorant of the lifestyle premium. Anything under £30,000 an acre for land that's well positioned for the property is a bargain. The smaller the package of land you're buying, the higher the cost per acre will be.
While nobody can guarantee capital growth of the order we've seen over the last decade, my advice would be to bite the bullet and acquire land if you can. With a growing population, an increasing aspiration for privacy, and planning rules that are becoming ever more relaxed, I strongly believe that property with land will become ever more desirable.
