youngsRPS director shares rural property market predictions

Harry Morshead, director and rural surveyor at youngsRPS, said: “As the countryside awakens from its winter slumber, the traditional spring influx of rural property to the market begins.

“Brighter days and greener fields provide vendors with the ideal opportunity to showcase their holdings at their best.”

However, Morshead noted that recent government announcements, including changes to inheritance tax and a perceived disregard for farmers, have cast a shadow over the market.

Despite this, Mr Morshead said there are positives, particularly in the “buoyant livestock sector.”

He said: “Farmers remain essential, and with a growing global population, land – a finite resource – continues to be in demand.”

According to Mr Morshead, 2024 was the most active market since 2018, with a 19 per cent increase in rural property activity compared to the previous year.

He said that the usual drivers of retirement, bereavement, and financial restructuring were present, but broader political and fiscal concerns also played a role.

He said: “Notably, 63 per cent of listings occurred in the first half of the year (up from 55 per cent in 2023), as vendors rushed to market amid fears of capital gains tax increases.

“A clear spike in completions came ahead of the October 2024 Budget.”

However, Mr Morshead said that 2025 is unlikely to see a repeat of this activity, as many landowners appear to be pausing, awaiting clarity before making decisions.

He said: “We may see more businesses restructuring ownership to manage tax liabilities, rather than outright selling.

“The true impact of IHT changes on supply will likely unfold over the coming years, especially if sales are forced to cover tax liabilities.”

Mr Morshead also predicted an increase in bare land sales, as interest rates and declining subsidy payments continue to impact the market.

He said: “Farmers needing to reduce debt or reshape operations may look to sell parcels of land.”

In terms of values, he said it is “early to call,” but guide prices appear to be more realistic.

He said: “Overpricing from the outset often deters buyers.

“Encouragingly, recent sales – all post-Budget – have met their guides, suggesting values remain stable.”

He cited the example of 250 acres of bare arable land in the Tyne Valley, which sold at guide price within six weeks to a farmer-investor in the area.

According to Mr Morshead, the core buyer base remains unchanged, with farmer-buyers “ever-present.”

He said: “While changes to support payments may affect valuations or borrowing ability, the fundamentals remain.

“Farmers who reinvest are doing so on the back of global food demand.”

He also highlighted the rising population and competing land uses – for food, fuel, development, and environmental recovery – as factors that continue to underpin value.

He said: “These pressures aren’t going away and will support prices in the medium to long term.”

Mr Morshead said that despite IHT reform, land still offers secure, tangible, and relatively tax-efficient investment – especially in uncertain economic times.

He said: “Even with potential IHT relief reduced to 20 per cent, it remains more attractive than no relief at all.”

Looking ahead, Mr Morshead said: “The coming year may pose challenges, but land remains finite and increasingly vital.

“We’re unlikely to see an oversupply.

“If priced sensibly, property will sell.

“The bigger test may come in future years as the true impact of IHT reform is felt – unless mitigated or reversed through policy change.”