Farm business Farmland investment continues,


despite Brexit uncertainties • Cautious sentiment among vendors • Rising interest from wealthy buyers • Wide range of values in marketplace


F


arms and estates market- ed during the fi rst three months of 2019 met strong interest from potential buyers – despite the economic and politi- cal uncertainty, according to land and property specialists Strutt & Parker.


Brexit doubts have led to a more cautious market sentiment among vendors with less land marketed during the fi rst quar- ter than in the past two years. But commercial farmland and resi- dential estates in the right loca- tion are in strong demand. “It has been a quiet start to the year in terms of the number of farms that have been launched on to the market – but tight sup- plies mean that demand remains strong for the right offering,” says Michael Fiddes, head of es- tate and farm agency at Strutt & Parker.


Investment money Mr Fiddes reports considerable interest in four farms totalling 1,900 acres brought to the mar- ket by Strutt & Parker during the fi rst quarter – particularly from buyers with rollover money to in- vest and private and institution- al investors.


A key trend in the farmland market is high interest from buy- ers funding purchases with mon- ey generated from outside farm- ing. These range from farmers with rollover money after selling land for development to wealthy individuals who to buy their own slice of countryside.


“This means that location, rather than the quality of the land, remains the main driver of demand. Many of these buy- ers are focused on factors such as privacy and the enjoyment that


86 ANGLIA FARMER •JUNE 2019


they will get from the land, rath- er than generating profi ts from farming activities.


Tax benefits


“Others will be focused on the tax benefi ts and may be tied to a very specifi c location. Some will be focusing on the potential to add value with a diversifi ed income stream. This is why we are see- ing a wide range of values in the marketplace.”


The small number of sales in quarter one mean average prices should always be treated with caution, says Mr Fiddes. Ar- able land sold went for £9,100/ acre, compared to a 2018 aver- age of £9,300/acre. But prices ranged from £6,000/acre to al- most £16,000/acre. The average value of pasture in Q1 was £7,000/acre.


“


Location, rather than quality, remains the main driver of demand


Variable farmland values across East Anglia


Very few farms came to the open market in East Anglia in the fi rst quarter, but Charles Wadsley of Strutt & Parker’s eastern region says interest has been positive with good levels of viewings to date. “Values continue to be var- iable across the region. While there’s a mix of local farmers, investors and residential buy-


ers in the market, it is location that is determining the farms achieving the best values, for ex- ample, in areas where there is little historic supply. “Many of these purchases are being funded with non-farming money, from external investors or existing farmers with devel- opment funds to spend. Larger farms are still proving popular


and there is a noticeable short- age of commercial arable units of 750-1,000 acres. “Although we expect more


farms and acres to come on to the market this spring, supply will remain tight so we antici- pate prices will remain relative- ly stable with buyers still hun- gry to purchase land in the right location.”


Political uncertainty continues to affect agricultural land values says Michael Fiddes


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