Rural valuations work has seen a substantial increase in the East Midlands in 2011. In total, Savills Rural valuers have valued rural assets to the total value of over £2billion.

These assets range from residential houses, farms, estates, commercial offices to even light-houses and windfarms, the widest range of assets in any field.

These valuations will generally have been produced for the purpose of loan security, tax and accounting. The figure represents 'Red Book' valuations and does not include assets valued for matrimonial and litigation purposes. 

Commenting further Antony Oliphant, of Savills Nottingham Office said: "It is clear from our bank valuation work that most of the farming industry is now in better health with stronger cash flow as evidenced by the purpose of farmers' loans. These are now less in the way of debt restructuring and more to do with expansion, modernisation and the future. Typical loan purposes are for land purchase, improvements and now more frequently, poultry units. The question for the Valuer is what do these investments add to the farm;  in many cases it will not be the cost."

He adds: "Overall farm valuations have become more technical requiring a better understanding of the underlying business that supports asset values as well as the state of other property markets, particularly where farmers have diversified"

Despite the better health of farming he said that buyers over the last 12 months have become more selective causing values in different areas and soil types to diverge. The company say that this has highlighted the need for excellent local knowledge for any valuation as well as for guide price advice in respect of a farm a sale. For pig, poultry and dairy units a great deal depends on current margins and the sector outlook said Antony.

Savills experience from its last 12 months valuations is that the malaise in the wider property market is having a greater impact on farm values. The depressed state of the residential market has to be accounted for in valuations and where commercial property conversions are consented for farm buildings in the urban fringe Savills say that the value added is coming under pressure again.

Continuing Antony Oliphant said: "What is important to landowners and farmers as well as banks and other professionals is that a robust valuation is backed by good comparable evidence from the relevant sectors so that the full value of an asset is recognised but not overstated" He said that arriving at this point can take considerable professional input and require property expertise from other departments within Savills including Planners and Leisure experts. Commenting on this point Antony Oliphant said that Savills pursue a stringent due diligence process with internal and external auditing being common practice to ensure that each valuation conforms to the highest standards of factual accuracy and reasoned opinion.