Farmland values stable as volume marketed shrinks
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.
Partner Giles Allen, reporting on the East Anglia market, says values locally are holding firm but only smaller holdings have come to market in the sprin. He says: “We have seen a wide selection of farms and blocks of land come to the market in East Anglia this spring but it is notable that none has been bigger than 750 acres.
“Values are holding firm – prices for arable land continue to range between £7,000/acre and £10,000/acre, with location, soil type and water availability being the critical factors in determining which farms achieve the best prices.
“We are currently selling 300 acres of light land and grass that comes with a large abstraction licence which has sparked good interest with competitive bidding and we expect the sale to conclude quickly.
“It proves that landowners and farmers are conscious that security of water supply can be key to profitability as it allows greater flexibility of cropping and means there is considerable demand for irrigated light/ flexible land, with the resulting values being at a considerable premium to the rest of the arable land market.”
Strutt & Parker’s head of estate and farm agency Michael Fiddes, looking at the wider picture, added: “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.
“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.”
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.