Biodiversity, Amenity and Diversification

There have always been many reasons why people buy farmland and property.

For some it’s born of necessity – business expansion perhaps, or a requirement for a certain type of asset in a specific part of the country.

Farmers facing the once-in-a-lifetime opportunity to buy the neighbouring field often can’t resist temptation too.

Others may simply be moving, taking on a new challenge or investing in what has always been an extremely reliable asset.

But, across the country, the Carter Jonas agency team has noticed a new wave of buyers.

They want the land, but they don’t necessarily want it for traditional reasons. They want the land’s potential to deliver an alternative income, escapism, or sometimes both.

The value assigned to small blocks of land has dramatically increased amid a perfect storm of greener living aspirations and government policy shifts away from food production.

Simultaneously, many people’s priorities changed during the Covid lockdowns. Demand for a better work-life balance, more space and access to the outdoors have all inspired people to think outside the box.

And grants enabling woodland creation have also begun to capture investors’ attention. Together, all these factors have ensured that plots that would have been overlooked a couple of years ago are now attracting a premium.

Until recently, land sales centred on three sectors: lifestyle, agricultural and sporting.

“There couldn’t be a better time to sell a small parcel of woodland.”

“The fourth sector, which has taken off significantly, has only really emerged in the past nine months,” says Carter Jonas Partner David Hebditch. “This biodiversity market is all about carbon, the environment and the overall shift we’re experiencing towards green.”

“There couldn’t be a better time to sell a small parcel of woodland.”

While this market is still in a state of flux, it has already made a significant impact.

David reports that most of the land he has brought to the market since last September has received interest from charities and businesses searching for ways to offset their emissions and demonstrate environmental responsibility to their employees and stakeholders.

“For instance, the owners of a factory, where all the employees are driving to work, and multiple trucks are coming and going from the site every day, may decide to buy 200 acres in deepest, darkest Devon so that they put it into woodland grant schemes, clean up the water and introduce nesting birds,” he says.

“We’ve seen many instances where such organisations have outbid the local market. Where local farmers only see a tertiary piece of poor-quality land, buyers in the biodiversity market have different plans, and they’re happy to pay more to make them a reality.”

Examples of small plots of land sold by David recently include 30 acres of sloping grassland near Shepton Mallet, upon which the buyer intends to plant trees. The Woodland Trust purchased 133 acres of pasture near Exmouth, and three parcels of land totalling 170 acres at Water Farm in West Somerset have been sold to a corporate buyer, a woodland charity and a buyer who intends to undertake some rewilding.

Small spaces suitable for planting and existing woodland have seen a huge rise in interest following the establishment of grants such as the England Woodland Creation Offer, which are designed to incentivise landowners to plant trees in order to meet the government’s ambitious targets.

“Just a few years ago, woodland would have sold for £3,000 to 4,000 an acre,” David says. “Right now, it will go for closer to £8,000 or 10,000, particularly if it’s a smaller block.

“The level of interest we receive in small plots of land would surprisea lot of people”

This land isn’t always snatched up for environmental purposes though – demand for amenity plots is another trend that shows no signs of slowing down anytime soon.

Reeling from being confined to their homes with only an hour’s exercise a day, it’s perhaps no surprise that Carter Jonas has seen a substantial rise in the number of people looking to buy land for themselves.

A one-acre plot near Bath generated 165 viewings in just two weeks, finally selling for significantly more than the guide price.

Granville Acres is a block of grassland with a dilapidated barn, located on the outskirts of Bath.

Being in an Area of Outstanding Natural Beauty meant that opportunities for building a residential dwelling were very low, but this didn’t seem to put
people off.

“As well as being in an AONB, Granville Acres is in the Bath and Bristol Greenbelt and forms part of a registered battlefield,” Carter Jonas Partner Arthur Chambers said. “Although landowners may feel this would reduce its appeal, in this instance it really didn’t seem to put any buyers off.

“Many people thought it would make a nice pony paddock, a site for a horticultural enterprise or a spot suitable for a glamping enterprise, particularly considering its proximity to Bath.

“Some thought they could take their own caravan there and it would become their holiday spot. Others who lived down the road thought they could go camping there on weekends. What’s unproductive to one person is full of potential for another.”

Landowners with small fields which deliver limited returns from agriculture could definitely cash in on the growing demand.

“The level of interest we receive in small plots of land would surprise a lot of people,” Arthur added.

“Often the best blocks to sell are those which don’t contribute enormously to the agricultural income from farming. They might be small, a difficult shape to manage or on poor soils for example.

“We would advise landowners to look to those fields on the edge of the farm with good access or in a desirable location. This will build interest from bidders and, once sold, shouldn’t affect the day to day running of the farm.”

“Demand for estates with accommodation is through the roof”

Those looking to future proof their estates and spread risk are still diversifying, with holiday accommodation proving particularly popular.

As holidays abroad continue to be difficult, the British staycation market has boomed. Many properties are booked up for the foreseeable future and experts predict this trend will not be short-lived. This is great news for estates who already have accommodation on site, but competition is fierce for those looking to change their lifestyle and buy an existing business.

“Demand for estates with accommodation is through the roof, so the market has slowed down because a lot of people are holding onto what they have – taking the cream to make up for the trade lost last year,” said Stephen Richards, who heads up Carter Jonas Leisure.

However, purchasing a property with holiday accommodation already in situ is preferable to creating a business from scratch, because of the timescales involved and the necessary bureaucracy.

“We get lots of people contacting us because they’d like to buy a plot of land and set up a wild camping business,” Stephen said. “But often they haven’t taken into account the pitfalls.

“Securing planning permission, building the business and then establishing it will take three years,” Stephen says.

“You’re much better off buying something that is already established and adding to it.”

Self-catering holiday accommodation is proving particularly popular with holidaymakers.

“From pods and yurts at the glamping end of the scale, all the way through to five-star cottages, there is demand for everything at the moment,” Stephen said. “Self-catering is particularly in demand because it’s probably the most Covid-safe.

Stephen has worked in the industry since 1997 and believes the leisure property market is currently in the best shape he’s ever seen it.

“People’s budgets are bigger – they might have spent thousands before on a trip to Barbados every year, so the cost of a British staycation seems modest in comparison,” he said.

“There has already been an increase in prices, and they will probably be pushed up even further. One client has put their prices up by 20% because they lost out on income from not being able to open for the full season last year, and they’re fully sold out.”
However, he warns against farmers and landowners jumping on the bandwagon before really considering their suitability.

“It’s easy to get carried away with thoughts of how much money you could make, but frankly if you don’t enjoy dealing with the general public then it’s not for you,” he explained.

“Think about your skillset and who is going to run the business. Will you be happy to have the general public on your land?

“It’s not for everyone – some simply don’t want to, so instead they opt for converting barns to use as offices so they don’t have to be involved on a day-to-day basis.”

If you’re thinking of moving or expanding and would like advice, find your local Carter Jonas rural agency team at carterjonas.co.uk/contact.