Entitlement Trading Update

Trading activity has picked up drastically since the release of 2011 entitlement statements with prices of £230 to £240 per hectare being achieved for non-SDA entitlement.  SDA and SDA Moorland entitlements are trading in the region of £200 and £35 per ha respectively.

The same story as last year seems to be unfolding with demand holding prices steady into the new year with the likelihood that values could increase to the similar level of £260+ per hectare as was achieved at the height of trading in 2011.

 However, it all hinges on the progress of the CAP reform negotiations and whether another payment under the current scheme, similar to 2013 payment, will be made in 2014. If negotiations do delay the implementation of the new scheme then market value of entitlements are likely to increase, however this is currently unknown and is likely to remain that way beyond the 2nd April deadline. We are expecting more information regarding the CAP reform to be published in late January early February which we hope will expand further on the legislative proposals that were published back in October. 

 The Naked Land market may affect the value of entitlements far more than previous years, as individuals who have historically rented in land to activate surplus entitlements may opt to sell entitlements instead this year, which will in turn increase supply and could potentially reduce market value. See further information below.   

For list of available entitlements please follow the link below:

 http://www.entitlementtrading.info/ord_ents.html 

NAKED LAND

 To sell surplus entitlements or rent naked acres?

 Several early naked land deals have completed recently in the region of £55 to £60 per acre. With the potential of a 2014 payment, returns from renting naked land at £55 per acre do exceed what would be achieved through selling at current market value, however over the next two years, at this level of rent, renting naked land doesn’t stack up. Risk adverse individuals may potentially look at selling surplus entitlements rather than renting naked land again this year. Again it will all hinge on the progress of the CAP reform.