When talking about estate agents I wouldn’t go as far as the native chiefs in the old-style cowboy and Indian films who would look solemn and say “White man speak with forked tongue.”
But because most estate agents have to make a living by at least pretending to be optimistic I take their every individual pronouncement on land values with a large pinch of salt.
However, if a report comes out from the Royal Institution of Chartered Surveyors (RICS), I pay rather more attention. And what the latest report indicates is that while house prices may be in a trough and liable to fall further, land prices have risen remarkably in these troubled financial times.
So much so that in the first six months of this year the average price of British farmland, taking in all types, was a record £6,115 per acre. The average for arable – crop growing – land of all grades was £6,681, for bare pasture £5,549.
Looked at any way you like, which for most of us means from the outside, that’s a lot per acre and the profit needed to make a decent annual return is higher than most of us might think possible.
Five years ago when, if memory serves, the boom in housing prices was well on its way to its 2007 peak, the average price of British farmland was “only’ £3,809 per acre. How come it has virtually doubled in five years during which we’ve had the banking crisis/collapse, the housing market collapse and are still in what can only be called recession?
It seems, according to the RICS, that old cliché about land “they aren’t making it any more” proves yet again that clichés exist for a reason – they might sound hackneyed, but they’re accurate.
That is, not a lot of land is coming on the market, grain and oilseed prices are high, sheep and cattle prices are good, and the rising price is being driven by existing farmers, not by the hobby farmers and city types looking for a country house and horse paddock of recent years.
According to the RICS statistics, almost three quarters of the 96,000 acres of land sold in the first six months of this year were bought by commercial farmers extending their operations, probably intending to run yet more land with much the same machinery and labour.
Such commercial farmers – some, let’s not forget, now on an almost industrial scale in the acreages they farm – beat off competition from developers and institutions say the RICS. A few years ago “lifestyle” and investment buyers accounted for more than half of land purchases for the first time; their share in the first six months of this year was barely 20 per cent.
But – there’s always a but, isn’t there? – within the national averages there lurk some large differences. Prices in north-east England saw the biggest average increase of 14 per cent; prices in the Midlands of England rose 10 per cent; but prices in north-west England were down 1 per cent and in Wales the average fell by 2 per cent.
There is also the point that we’re only looking at six months results and the fact that even hard-headed agri-businessmen and experienced commercial farmers can get carried away by current high prices for crops and animals and think the good times will roll for ever. Look no further than recent astonishing prices for store cattle and near-record prices in some marts for store lambs.
There is also the question of collecting statistics. An example I’ve used before, but one I always bear in mind when confronted by statistics gathered from around the country, is the Indian – as in large Asian country, not the Indian of cowboy films before they began to be known as native Americans – bureau of statistics.
According to Denis Healey, who also bore the example in mind when he was Chancellor of the Exchequer, the Indian bureau collected and collated enormous numbers of statistics from the states. The states in turn collected them from areas. The areas collected them from parishes. The parishes collected them from villages. And in every village, said Denis, the headman put down exactly what he liked. Far be it from me, of course, to suggest that estate agents round the country would do anything like that.
For the second successive time NFU Scotland has appointed a new chief executive from within.
Scott Walker, with the union for the past 17 years and policy director for the past seven, takes over this month from James Withers, who is moving on to become, as of next month, chief executive of Scotland Food and Drink.
I think the union has made a good choice. James Withers will be, by any yardstick, a hard act to follow because he is one of the brightest and most able young men in a top job I’ve ever dealt with. But Scott Walker in his own more under-stated way will, I believe, be equally efficient and effective.
What is worrying me more is that when the announcement was made it included the comment that Scott will be the union’s 10th chief executive, and I’ve dealt with seven of them.