The volume of farmland which came to the open market in England during the first six months of the year was the lowest for five years, according to land and property specialists Strutt & Parker.
“Spring is traditionally one of the most popular times to launch a farm for sale, but while Q2 was busier than Q1, supply is historically tight,” says Strutt & Parker’s head of estate and farm agency Michael Fiddes.
“The first half of 2019 saw 43,000 acres publicly launched, which is the lowest area marketed since 2014.
“The fall is not unexpected as landowners who have a choice about when to sell are holding back until there is greater economic certainty. This is something we have seen during previous rounds of CAP reform, where uncertainty about agricultural policy has led to a fall in the amount of land being marketed.”
The biggest fall in volume was recorded in the East Midlands, with only ten farms publicly marketed so far this year, compared with 20 or so usually. Supply is also below average in the East of England, West Midlands and Yorkshire and Humber.
Bucking this trend has been the South West, where 37 farms have been marketed, which is almost 50% more than usual; half of these farms are small (less than 200 acres) mixed or lowland livestock farms.
Mr Fiddes said tight supplies are helping to underpin average values which remain consistent at £9,100/acre for arable land. However, the range in values is wide – this quarter ranging from £6,000 to £16,000/acre. Overall, the trend is for fewer sales at £10,000/acre or more, than at the peak of the market in 2014-15, with more transactions falling in to the £8,000 to £10,000/acre price bracket.
“Overall, farms and estates where there is potential to generate mixed revenue streams, combining residential, commercial and agricultural enterprises, are tending to attract strong interest, as are best-in-class farms where there is a neighbouring farmer looking to expand.
“Location remains critical, but buyers are also placing greater emphasis on the quality of the holding than perhaps they were three or four years ago. For example, they are now looking more closely at issues such as accessibility, water availability, soil type and how well the farm has been maintained.
“The market is complex, with different factors in play across each region. Knowledge of the local market and the major players in it is essential. Good sales results are achievable, but vendors may need to be patient.”