Brexit Briefing: The Impact

on Rural Markets

The Impact on Rural Markets
The Impact on Rural Markets

13 July 2016, by Ian Bailey

Uncertainty and Opportunity

Summary

■ In the short term, there are factors to suggest the additional downside (over and above our current forecasts) of Brexit on farmland values may be muted.

■ The weak pound creates export opportunities and if it continues trading at current levels in to September, there will be a significant increase in farm subsidies to UK farmers in 2017.

■ Also the weak pound creates a favourable buying environment for overseas buyers, and this, along with the potential reduced supply driven by uncertainty, may help support farmland values.
■ In the event of a significant reduction in farm subsidies and therefore incomes, the negative effect is likely to be greater on rents than land values.

 

The full impact of Brexit on all of the UK's property markets will be very dependent on the macroeconomic background and the evolution of the story over the next two to three years.

We must stress it is early days and there are many unknowns. Uncertainty has to be the key factor and this will principally be around those factors that have direct impact on farm incomes. It is likely that farmland market activity in the remainder of this year will be more subdued as potential sellers wait and see.

This paper is our first analysis of how this changed world might affect rural markets. It will be updated on a regular basis over the following months as hard data, anecdotal news and our forecasts evolve.

Articles from 'Brexit Briefing: The Impact on Rural Markets'

Macro-economic background

Uncertainty has to be the key factor and it is very likely that farmland market activity in the second half of this year will be more subdued as potential sellers wait and see

Farmland market

13 July 2016

Farmland market

Scarcity of land to rent will moderate any downward pressure on Farm Business Tenancy rents

 
 

Key contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

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