High urban rents and falling rural land prices drive flight of startups to countryside ⁰

We’ve reported before on the flight of tech firms and other startups from the UK’s cities to the countryside. Now it appears that 2016 will see an acceleration in the exodus, as a consequence of the perfect storm of expensive rents in the cities, falling rural land prices and a growing number of people using technology  and improving digital infrastructure to live somewhere they feel they have a more balanced life. That is the striking conclusion of a new survey from the Royal Institution of Chartered Surveyors (RICS) and Royal Agricultural University (RAU) indicates. Over the second half of 2015, non-farmers, such as those starting-up cottage industries, accounted for around 25 per cent of rural land sales. This figure was up from just 18 per cent in the first half of 2015, 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 per cent of all sales.

By contrast, property developers accounted for only 1 per cent of rural land sales over the same period, a decrease of 2 per cent. While sales to individual farmers fell from 62 per cent to 57 per cent. Meanwhile, survey respondents have this year predicted that land prices will fall over the next 12 months, with 34 per cent more rural Chartered Surveyors expecting to see prices drop than rise.

RICS Chief Economist, Simon Rubinsohn said: “While rural land prices have risen over recent years, the global fall in crop prices is likely to cause prices to drop over the next 12 months. Added to that, commercial and residential property prices in our towns and cities are continuing to rise. This is likely to make rural land increasingly attractive to those outside traditional farming communities. Already, a quarter of all countryside land 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 East London, Britain’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. New entrants to farming businesses continue to face barriers, but at RICS we are currently working with the Fresh Start Land Enterprise Centre (FSLEC) who are developing a pilot ‘matching service’ for potential land entrepreneurs, helping to bring together those looking for new opportunities in agriculture with those who have land and rural real estate to let.”

Image: Scott Gustafson