THE GREATEST IMPACT HAS BEEN FELT IN THE “COMMERCIAL” FARMING COUNTIES, FOUND PREDOMINANTLY IN THE EAST OF ENGLAND.
In areas of Cambridgeshire, a county in the east of England where some of the most versatile and highest quality Grade 1 and 2 land can be found, land values have suffered significantly since the peak in 2014/2015. At the high point, the best quality farms (superior and higher in value than the average figures represented in the graph above) were trading between £27,000 and £34,000 per hectare. Similar farms could now be bought for £20,000 per hectare.
This 2015 high point for land values coincided with a period when sterling was trading at a recent high of £1 : €1.40 (Nov 2015). Since the peak and the subsequent BREXIT vote in June 2016, sterling has fallen by 15 – 20%. At the same time, land values have fallen by over 20% in places. This has helped push-up the buying power of international investors in UK farmland by 35 – 40%, as shown on the graph below.
Figure 2: Land transactions of high quality farmland in Cambridgeshire, England, converted to euros based on the exchange rate at the time of the transaction.
50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
Q1 Q2 Q4Q3 Source: Carter Jonas Research Q1 Q2 Q4Q3 Q1 Q2 Q4Q3 Q1 Q2 Q4Q3 Q1 Q2 Q3
Stephen Hall, Head of Rural Investment, Carter Jonas, said: “The environment for non-sterling investors into the UK is an extremely positive one currently. We’ve seen UK assets across all sectors become more attractive for overseas buyers because of the reduction in the value of sterling. Twinned with the reductions in land values, driven by lower farm profitability and uncertainty regarding the future farm subsidy system in the UK, means that we are seeing our non-sterling investors in land to prepare for a buying opportunity, especially as the BREXIT talks progress.
More and more, the likelihood of a messy divorce with the EU is affecting the value of sterling, and as we get closer to the UK officially leaving the EU in Spring 2019, the opportunity for overseas buyers to invest in the UK land market is becoming increasingly apparent.”
Stephen Hall E:
stephen.hall@carterjonas.co.uk T: +44(0) 20 7518 3264
29 | ADMISI - The Ghost In The Machine | May/June 2018
2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018
€ / hectare
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