THE COUNTRYSIDE EXPERIENCE ADVERTISEMENT ALL THE SIGNS POINT TO A


average value of bare farmland is now £7,313/ acre, according to the index. However, looking forward it is hard to predict


the longer-term impact of Brexit. The real issue that will aff ect values is supply. I think the market will stand a limited


increase in the number of farms for sale; in fact, prices could be higher for those that bring their units to the market early, but if interest rates rise hastening the trend, prices will start to suff er. We won’t see the huge drops experienced in Ireland following the fi nancial crisis, but it’s not inconceivable that average values could settle at around £6,500/acre until supply and demand comes back into balance. After that, I think we’ll see prices begin to increase steadily again.


Clive Hopkins


ENGLAND Since the beginning of the year, many of the farms or estates that had been on the market for some time have been sold, so the current trend really is a shortage of stock. Buyers seem to have got their heads around Brexit, but vendors are more cautious about selling unless they really have to. This is refl ected in values by type, with Knight Frank’s Farmland Index stabilising in the fi rst three months of 2017 and dropping by just 1.7% in the second quarter, following a drop of 8.5% last year. The


SCOTLAND Last year, the Scottish farmland market remained fairly resilient despite the Brexit vote and our latest Scottish Farmland Index shows the average value of Scottish farmland grew in the fi rst half of 2017. Across the board, prices rose by 0.6% to £4,253/acre. Looking ahead, the market faces challenges,


but we’ve been saying that for a while. The prospect of only two more years of the current Basic Payment Scheme for farmers in Scotland is now becoming a reality. There remains a big question mark as to how both the Scottish and UK government are going to support farmers going forward. However, despite all this, the signs so far this


year suggest that there’s still a strong appetite for farms. Interestingly, the fi rst few months of 2017


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STRONG APPETITE FOR FARMLAND Knight Frank’s Head of Farms & Estates, Clive Hopkins, discusses the farmland market across the UK


Barlings Estate, Knight Frank


saw two large farms sell privately for premiums in the Scottish Borders, which shows the health of the marketplace, and we’ve more recently seen demand for smaller units, with 20 and 30 viewings for two sub-£1m farms we’re selling in the Borders. The market will remain price -sensitive so pricing is key. We have a book of active buyers looking to invest, including farmers wanting to expand or relocate and investors looking to take advantage of the tax benefi ts of ownership.


WALES Farms and estates in Wales are the most dependent on subsidy payments and agri- environment schemes of any region in the UK. There’s therefore a certain amount of trepidation about the shape of the new home- grown agricultural policy that will


take


the place of the EU’s Common Agricultural Policy. So far, we haven’t seen a huge impact on prices; mainly because Welsh land values never hit the peaks seen in England and Scotland. Topography is such a limiting factor here that, regardless of commercial acumen, it’s very diffi cult for farming businesses to be highly profi table. Looking forward, some people are pessimistic


about where values will head if the fi nancial support for farming is cut back, but I believe the Welsh Assembly will be fi ghting strongly to make sure this doesn’t happen. It fi rmly believes that support for agriculture is support for the


CONTACT DETAILS


To view Knight Frank’s farms and estates for sale, visit knightfrank.com or call 020 7861 1064


Golden Grove Estate, Knight Frank


wider social fabric of rural communities and their economies. Payments for agricultural activities may well be cut, but they could be replaced by schemes promoting rural enterprise, the environment, biodiversity, water quality and carbon sequestration to mitigate the impact of global warming.


The Gualin Estate, Knight Frank


THE COUNTRYSIDE EXPERIENCE 5


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