East Anglian farmland values remain polarised
Average rural land values remained broadly flat in East Anglia during Q1 2019 according to new data from Carter Jonas, the national property consultancy.
Data from the firm’s team in Cambridge showed that regional variations were apparent and buyers and sellers continued to remain cautious due to Brexit uncertainty.
Whilst transaction levels traditionally decrease during the first quarter of the year, there has been a significant reduction in activity across the sector, and this languid market has impacted on pricing levels.
Since the end of March, the number of farms offered to the market has increased, but with limited evidence of deals yet done.
In East Anglia, the average arable land value is £8,500 per acre and the average pasture land value is £6,000 per acre. The results for the region slightly differ when compared with the national average for arable land which is £8,719 per acre, down by 0.3 per cent on Q1 2018.
National average pasture land values fell across both the quarter and annually, by 0.9 per cent and 1.3 per cent, respectively, to £6,803 per acre.
Across East Anglia, buyers are still keen to acquire land for the right price. Nationally, with the exception of the South of England where activity remained robust, limited availability has restrained the market.
Assets that are best-in-class, well-located or offer viable development potential remain attractive. However, percentages continue to hide polarisation with the same parcels continuing to achieve over £10,000 per acre.
Mark Russell of Carter Jonas, said: “Whilst the market has slowed over the last 12 months, there are buyers in the market looking to acquire for the right price.
“Limited supply and wider economic and political concerns have caused people to take stock, with many waiting for clarity over Brexit before launching or buying assets, others are taking advantage of being into the market early.
“Faced with the heightened level of uncertainty over the past few months, these findings are not unexpected. In the current climate, demand for land is being driven by location and opportunities to add value and diversify.
“For example, land with development potential has long since commanded a price premium, particularly when compared to pure agricultural land values.
An ongoing relaxation in planning policy has unlocked more opportunities for the development of agricultural land, with developers and house builders, on the whole, willing to absorb any additional costs. In many areas, rollover buyers continue to stimulate activity, looking to acquire in the locality of their existing holdings.”
Bank support remains available for agricultural purchasers. This is reflected in debt levels which are at record highs. Low interest rates continue to benefit the sector and there is clear evidence of purchasers looking at long term fixed rates.
Russell concluded: “While we cannot avoid the current challenges impacting on the market we are starting to see signs of improvement. Buyers are continuing to drive activity and some land parcels, are attracting premium prices.”