Farmland market proves resilient,
although property sales take longer • Flurry of activity during fi rst half of 2017 • Arable farmland now averages £9,800/acre • Further land expected to become available
A
burst of activity in the farmland market since Christmas has reduced
the backlog of land left on the market from 2016 – but demand for farms, and the prices paid for them, remains highly variable. This year started unusual-
ly, with a signifi cant carryover of land on the market, said Mi- chael Fiddes, of agents Strutt & Parker. “Over 40% of the farms launched in 2016 were still avail- able at the end of the year, which is a far higher proportion than we have seen before.” A fl urry of activity over the past six months has seen a con- siderable amount of this land now gone under offer. In fact, a quar- ter of the land offered for sale in the fi rst of 2017 now looks to have found a buyer, said Mr Fiddes.
“This is encouraging and sug- gests buyers remain confi dent about land as a long-term invest- ment, although it is now taking longer to get sales to the point of completion. Buyers are being more cautious than they were when there was greater compe- tition in the marketplace.”
Higher proportion Analysis by Strutt & Parker also shows that over half of the live- stock and residential farms put on the market last year are still available or have been withdrawn – which is a higher proportion than for other types of farms. Based on the transactions in
the fi rm’s database, the average price of arable farmland sold in the fi rst quarter was £9,800/acre. However, if you exclude three sales which took place under exceptional circumstances and achieved £15,000/acre, the aver- age was £8,400/acre. “However, prices remain high- ly variable,” said Mr Fiddes. “A better measure, that shows the variability that an average can hide, is that almost 40% of ara- ble sales were for £6-8,000/acre, with most of the rest selling for over £10,000/acre.
“This highlights how polar- ised the market has become with strong prices still being achieved where there is both a committed
Estimated range in prices by region (Q1 2017) Arable
Bottom Average Top 25%
South East South West
25%
£7,500 £9,700 £11,200 £6,500 £8,500 £11,000
East of England £7,000 £8,500 £9,500 East Midlands £8,000 £8,500 £9,000 West Midlands £8,000 £8,900 £9,750 North
£6,700 £8,000 £9,700
buyer and a vendor with a farm that is attractive to the market.”
First quarter Looking at supply, there was a sig- nifi cant drop in land marketed in the fi rst quarter, possibly due to some vendors delaying market- ing to avoid the carryover from 2016 and due to more land than usual being marketed at the end of 2016.
Regional commentary
“This year started on a positive note with sales agreed on several offerings that had remained available during the second half of 2016. Buyers are now prepared to move forward, albeit paying prices which are typically 5% to 10% lower than a year ago.” Tim Fagan, East Anglia
Pasture
Bottom Average Top 25%
n/a n/a 25%
£5,200 £7,500 £8,800 £5,500 £7,250 £9,000 n/a
£6,500 £7,000 £8,250 £6,600 £7,000 £8,250 £4,300 £6,100 £7,300
Note: Prices in the chart are for vacant arable and pasture land only – and exclude the value of houses or buildings. Bottom 25% means if 100 farms were valued, the price of the 25th farm from the bottom. The average is the 50th from the bottom (and 50th from the top).
Mr Fiddes said he expected supplies to catch up later in the year, but based on his knowledge of what is going to be marketed in the coming months, levels were unlikely to exceed those seen in recent years.
“This is likely to support pric-
es, although undoubtedly a wide range in values will continue to be achieved depending on location.” Each quarter the Strutt &
Parker regional agency team estimates the range of prices in their area. “Farms are general- ly taking longer to sell and most prices have eased back from the highs of 2015 but overall the mar- ket remains pretty resilient giv- en the uncertainties associated with Brexit.”
JUNE 2017 • ANGLIA FARMER 71
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