Brexit delay impacts on market activity but there are still active buyers for farmland
Brexit-related uncertainty continues to weigh heavily on farmers’ minds and decisions on releasing land to the market continue to be delayed. However, despite a quiet market, there are active buyers for the right property in the right location and potential sellers would be advised to explore the opportunities.
It is well documented that market activity over the past 15 to 20 years has been low in the historical context with, on average, farms now changing hands just once every 200 years. However, the 74,000 acres of publicly marketed land recorded to the end of June 2019 is almost the lowest since our records began in 1995, the only exceptions being:
- 2001, the year foot and mouth closed the countryside, when just 61,000 acres were publicly marketed
- 2004, the year before the single farm payment was introduced, when supply to end of June was 74,000 acres – the same as this year.
The combination of policy change and political uncertainty is causing sellers to be more nervous than buyers and our research shows that average values across Britain have remained stable during the second quarter of this year.
For average values the pattern is similar at both country and regional levels. The average value of prime arable and grade 3 grassland across Britain is around £8,700 and £5,500 per acre respectively.
Given the current market conditions with so little supply available and the wide range of variables that influence prices paid, it is important to not over rely on average values.
Our agents report that there is a broad range of prices achieved either side of the average, with neighbours working quickly to secure rare opportunities to acquire adjoining land, and renewed international interest in farmland assets in well-located areas.
The recent correction in the value of bare commercial farmland is now creating opportunities for investors to make a reasonable return, and conservation-minded buyers continue to express an interest in marginal and high-nature value areas.
Read more: Market in Minutes: GB Farmland