The number of farms publicly marked in England during the first three months of the year fell, with poor weather delaying some launches and others choosing to market their land privately, according to Strutt & Parker.
The firm’s Farmland Database shows that during Q1 2018 only 18 farms of more than 100 acres were marketed in England, compared with 21 in Q1 2017 and 23 in Q1 2017.
Michael Fiddes, head of estate and farm agency, said: “Poor weather has contributed to a slow start to the year, both in terms of the number of new farms being publicly marketed and sales actually being agreed.
“However, despite this there are early signs pointing to the market remaining pretty robust, with our data showing average prices are higher than they were at this time last year and a number of new launches since the start of April.”
The database shows that the average price of arable land sold in Q1 2018 was £9,800/acre, which is the same level as in Q4 2017 and similar to the prices last seen in 2016 when demand for land was stronger.
The range in prices paid has narrowed ranging from £6,800 to £12,000.
Pasture prices continue to rise gently, with an average of £8,400/acre paid in Q1 2018.
“It is always difficult to draw firm conclusions about the farmland market based on Q1 data because we are inevitably dealing with a relatively small dataset given the majority of land launches in the middle six months of the year, “said Mr Fiddes.
“As we have been saying for some time, average prices only tell half the story because we continue to see a wide range in the prices being paid. There’s also the ‘hidden’ market for farmland to factor in, with a rise in private sales an increasing trend.
“Some vendors are choosing to market privately, as while they are keen to sell they want it to be at the right price and they know that prices can be highly-location specific. It allows them to test the market on their own terms.
“Overall, our feeling is that in terms of prices the year has started in much the way the last one ended – which signals we are at least enjoying a period of stability.”
“We are seeing fewer buyers this year in the south west region, but the ones we do have are among the most committed we have seen over the past couple of years. Many of them are looking to reinvest rollover funds from development, with others looking to expand their existing operations. Prices for arable land are currently ranging between £7,500/acre and £12,000/acre, while grassland is selling for £5,500/acre to £8,500/acre. Higher prices can be seen in exceptional cases.
“Looking ahead, I think the market will be relatively strong over the next few months, mainly due to lack of supply. Property that fits the needs of a specific market – either farmers, lifestyle buyers or investors – will continue to sell very well. However, farms and estates which aren’t right for either a lifestyle or a commercial purchase may stick around.” Charlie Evans, South West region
“Supplies are incredibly tight at present. Not a single farm over 100 acres has come to the open market in the north of England during the first quarter of 2018. This means that what is currently available is property left over from last year, being privately marketed or is in smaller blocks. As a result, average values have held up well with arable land typically making £6,250/acre to £10,000/acre and pasture ranging from £4,000/acre to £8,000/acre.”
“What buyers need to see are more properties coming to market which offer them opportunities over and above agricultural use. They are looking for farms which give them options in terms of income generation.” Will Parry, North region.
“We are seeing strong demand in areas where lots of development is occurring, for example, West Leicestershire/North Warwickshire, which is leading to a shortage of farms in those locations. This is because buyers are typically farmers who have the funds as a result of the development and are looking for land close to their existing farms.
“We have two farms available at present which are attracting a lot of interest. One is 215-acre farm in that hotspot of West Leicestershire and the other is a very attractive 870-acre commercial arable farm in the Lincolnshire Wolds.
“Across the East Midlands region as a whole, arable land is averaging about £8,200/acre and pasture around £7,200/acre.” Sam Holt, East Midlands region
“Very little land came to the open market in the East of England during the first three months of the year and I am expecting supply levels to stay low in the immediate future. A feature of the current market in East Anglia, however, is that considerably more land is being sold privately.
“Most of the land which was launched during 2017 has now sold, with prices typically ranging from about £7,500/acre to £9,750/acre. The best prices are being paid for easily-accessible land, with medium to long-term development potential.
“Demand remains strong and we have seen a significant increase in the number of buyers with proceeds from development land sales looking for farmland which is eligible for Capital Gains Tax rollover relief.” Giles Allen, East of England region
“Farms continue to be in relatively short supply, although we seem to have plenty of buyers on the books. As always, lifestyle buyers are strong in the South East and they are looking for a good house, surrounded by enough land to create a good amenity feel. There is also a steady trickle of rollover buyers looking for good quality bare commercial farms.
“Despite the limited stock, farms do need to be priced appropriately as buyers are aware that prices have been coming down over the last year or two. Unless it is on their doorstep, or has strategic potential, most buyers are hoping to snap up a bargain. In terms of prices, arable land is typically selling for between £7,500/acre and £10,600/acre, with pasture ranging from £5,300/acre to £8,300/acre.” Matthew Gibson.
South East region
“It has been a quiet start to the year in terms of transactions and there has been little movement in terms of prices compared with the last quarter. Arable prices are typically ranging between £8,000 and £10,500/acre, with pasture prices around £6,000 to £8,250/acre. Some new farms have come to the market in recent weeks, with the majority in the west of the region and Wales. There will be more acres available shortly, although some of this will continue the trend of being offered privately, without any advertising – at least to start with.” Matthew Sudlow, Central region