Fields of gold as East of England’s farmland market remains resilient
Despite an uncertain economic and political backdrop farmland values in the East of England have remained strong, highlighting underlying confidence in rural investments and the ongoing resilience of the sector, Savills reports.
The Savills Farmland Values Survey for the third quarter of this year shows that values are robust, with minimal changes to the end of September. However, prices remain highly localised and primarily driven by location, asset quality and soil type.
Oliver Carr, from the rural agency team at Savills Cambridge, said: “There is no doubt that a combination of Brexit, agricultural policy reform and the COVID-19 pandemic has had an impact.
“However prices have remained resilient and there is genuine confidence among buyers and real strength in the market.
“Limited stock and high demand has created the perfect environment for those hoping to sell. Private and off-market sales have been a popular avenue for many vendors, but of those we know about on the open market there is clear evidence that buyers are willing to pay for property deemed ‘best in class’, with several significant deals crossing the line.
“A commercial arable farm near Baldock extending to 650 acres and a house with a guide price of £7.14 million has recently gone under offer for a strong price, as has a smaller but similar farm at Burwell, both subject to contract.
“There continues to be a remarkable uptick in interest for houses in the country and amenity farmland as many urban-based buyers seek more green space.
“Rural estates with notable residential components are also attracting interest at the higher end of the market, while greenfield land with forestry planting potential shows natural capital motives are beginning to gain traction in the market.”
According to Savills’ database – which tracks sales over 50 acres – 95,160 acres of farmland were brought to the public market nationally as at September 30. Over half of this activity occurred between July and the start of October.
Great Britain’s average ‘All types’ farmland indicator remains unchanged at £6,690 per acre, with prime arable down 0.1 per cent to £8,690 per acre. Grade 3 arable was up 0.2 per cenmt to £7,323 per acre while grade 3 pasture land was unchanged at £5,384 per acre.
Carr added: “Looking ahead, the sector is set for radical change, with trade and policy reform expected to develop in detail before the year end.
“However, times of economic uncertainty have traditionally proven fruitful for farmland investors and our analysis shows in the seven years following the global financial crisis farmland outperformed UK equities, gold and bonds.
“As a result we expect the demand fundamentals to remain strong and the market steady. Momentum behind a ‘green recovery’ is likely to complement this, as society and governments recognise the importance of the land based sector in mitigating the effects of climate change.”