Rising urban property prices fuelling rural start-ups

INCREASING urban property prices and falling land values in the North West could be fuelling a rise in new rural business start-ups in the region.

This is according to the latest survey by the Royal Institution of Chartered Surveyors and the Royal Agricultural University.

Non-farmers, such as those starting-up cottage industries, accounted for around 26% of rural land sales in the region over the past six months.

This figure was up from just 11% in the last half of 2014, according to the RICS/RAU Rural Land Market Survey H2 2015 and the trend was strongest in South East England where non-farmers accounted for 32% of all sales.
 
By contrast, property developers accounted for only 1% of rural land sales in the North West over the same period, while sales to individual farmers fell from 88% in the last six months of 2014 to 66% during the final six months of 2015.  

Meanwhile, survey respondents reported that the average cost of an acre of land in the North West fell from £8,750 during the first half of 2015 to £,8000 in the final six months of 2015.
 
William Douglas of Savills said: “The North West’s farmland market shows relative resilience to the continuing poor commodity prices; notably sale values have been maintained for the best land in prime areas.

“Where we have seen demand and prices soften is for the poor quality ground in less desired locations. Generally buyers are becoming more discerning and price sensitive, especially when commodity prices make forecasted debt servicing more difficult.”

RICS chief cconomist Simon Rubinsohn said: “Commercial and residential property prices in the North West’s towns and cities are continuing to rise.
 
“This is likely to make rural land increasingly attractive to those outside traditional farming communities. Already, over a quarter of countryside land in the North West is being purchased by non-farmers – lifestyle buyers or hobby farmers – throw all these factors into the mix and this trend is set to rise.”

RICS head of policy  Jeremy Blackburn said: “Start-up businesses do not have to be confined to the trendy streets of the North West’s cities; the region’s countryside has a great deal to offer young entrepreneurs.
 
“Market conditions appear to be encouraging a wave of new types of rural business, and help must be given to support this trend further if our countryside communities are to thrive.”