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By Elliot Taylor, Partner and Farm Business Consultant.
As the Chancellor prepares to deliver the Autumn Budget on 26 November, many in the rural property sector are paying close attention. In the North of England and North Yorkshire, where farms, land and estates represent family heritage as much as financial assets, decisions made in Westminster can have a swift and significant impact.
At first glance, the Budget may appear to focus on broad issues like tax, spending, and economic growth, but within the detail are several proposals that could have meaningful consequences for our regional market.
One area to watch is the treatment of Inheritance Tax (IHT) and gifting rules. Currently, individuals can make lifetime gifts, and if they survive for seven years, those gifts fall outside of IHT. There’s speculation that the government may extend this seven-year period, remove it altogether, or introduce a lifetime cap on tax-free gifting. For farm owners planning to gradually transfer land or business assets to the next generation, such a change could prompt a shift in behaviour. Some may look to accelerate transfers before any rule changes, while others might hold off until the new framework becomes clearer. Either way, this uncertainty could influence market activity.
Capital Gains Tax (CGT) is another area drawing attention. There’s talk that rates or allowances might be adjusted, or that CGT could be brought more in line with income tax for higher-value assets. For buyers, this raises questions about future resale implications, while sellers may see a window of opportunity to act before any increase. As a result, timing will become even more critical for both sides of a transaction.
Then there’s the ongoing conversation about property taxes, including the potential for a “mansion tax” or additional levies on high-value homes and estates. Reports suggest the Treasury could target sales above certain thresholds, such as properties worth more than £500,000 or £1.5 million. While this may not directly affect most working farms, in regions like ours, where some holdings include high-value homes, diversified holiday lets or larger rural residences, the impact could be real issue. Buyers and sellers of these properties will need to weigh up that added cost carefully.
So far, land prices have remained remarkably resilient despite economic pressures. Across England, farmland values have stayed close to record highs, though growth has clearly slowed. Arable land, which surged in value after the pandemic, has started to level off as higher interest rates, input costs, and the loss of direct payments reduce profitability. In the North, buyer sentiment has become more cautious, particularly for lower-quality land or holdings with limited diversification potential.
If the Autumn Budget tightens rules around gifting, inheritance or capital gains, we may see a shift in both supply and demand. Some owners could move quickly to sell or transfer assets before new policies take effect, temporarily increasing supply. A short-term rise in properties coming to the market, combined with more cautious buyers, could ease upward pressure on prices, especially for average-quality farmland.
Conversely, if landowners decide to wait until the tax picture becomes clearer, a restricted supply could help maintain current values. In that scenario, we might see fewer transactions but greater focus on quality, location and long-term opportunity.
It’s also worth noting the continued emphasis on environmental land use, including woodland creation, biodiversity net gain, and carbon markets. If the Budget reinforces incentives in these areas, demand could increase for land suited to such schemes. In contrast, purely agricultural land with lower environmental potential may face further value pressure as traditional profit margins narrow.
For higher-value rural homes and mixed-use properties, the potential introduction of a mansion tax could cool demand, particularly among lifestyle and second-home buyers. Even speculation about such measures tends to slow decisions as buyers wait for clarity from the Treasury.
In our region, mid-sized family farms are the most exposed. These are not vast estates with deep reserves but working businesses where land, buildings, livestock and tenancies are closely linked. Changes to IHT, gifting rules, CGT or property taxes could affect everything from succession planning to buyer appetite. If sellers sense tighter tax conditions ahead, more farms may come to market early, putting mild downward pressure on prices. If buyers anticipate increased taxation, they may take a ‘wait and see’ approach, leading to a more measured and less speculative market overall.
Interest rates remain another crucial factor. Recent cuts have brought some relief to borrowing costs, and if further reductions follow, that could stimulate renewed confidence in the farm property market. Lower rates would make borrowing for land purchases more affordable, potentially offsetting some of the caution created by tax uncertainty. This could encourage a new wave of buyers, particularly younger farmers or investors, back into the market, providing underlying support for values even if tax policy tightens elsewhere.
For anyone advising farmers, landowners or rural investors, this is the time to be proactive about strategy. It’s not just about price per acre but also about timing, structure and tax planning. Buyers should look past short-term returns and think carefully about how future tax changes could influence the long-term value of their investment. Sellers need to assess whether it makes sense to bring a sale forward or restructure before potential changes take effect.
The Autumn Budget may not include a headline announcement on farm sales or rural property, but its tax and fiscal measures could shape how deals are done and how confident both buyers and sellers feel. For the North and North Yorkshire, the message is clear, pay attention to the details, act early where appropriate, and align your decisions with both the economic and policy outlook.
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