NEWS
UK farm land values continue to rise and will do in 2013, say experts
15-10-2012
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One of the key factors helping to support values is the dwindling supply of farmland available to buy, according to the latest research from Savills.
‘There continues to be a real thirst for good quality blocks of arable land from a wide range of buyers and the biggest issue is the lack of supply. For other land types buyers are increasingly discerning and we are often finding separately letting the house with a few acres away from the bare land is the most successful route to maximising a sale,’ said Alex Lawson director of Savills land and farms.
Across Great Britain prime arable land values rose by 3.2% during the third quarter of 2013 to average just under £7,200 per acre. This puts the average rise in values so far this year at 7.3% and year on year at 8.5%.
In England the rate of growth was slightly slower at 3% for the quarter putting average values at £7,250 per acre, however prices of as much as £10,000 per acre are regularly achieved in competitive situations.
Values in Scotland performed most strongly during the quarter increasing by an average 7.3% to now average £6,450 per acre for prime arable land. This equates to a total growth of 9.7% in the 12 month period.
The performance varied in the regions with a substantial 8% rise recorded in the South West, with more muted growth elsewhere including just 1% in the eastern counties.
‘We don’t expect any further significant growth this year, meaning average growth for all land types in Great Britain will be at around 7%, although growth in the arable sector is likely to be higher,’ said Ian Bailey head of rural research.
In terms of supply, volume is down by 5% in England with the most significant falls recorded down the eastern side of the country, where for example volumes fell by 53% in the East Midlands and 28% in the East of England.
The picture was very different in Scotland where some 36,000 acres more land was marketed this year compared with 2011, an increase of 22%.
On a farm type basis activity is greatest in the arable and mixed farming sectors with dairy farms accounting for just 5% of all farms marketed.
Analysis of farm transactions in Great Britain, where Savills acted for the seller or the buyer shows that, in the first half of 2012, the activity of farmer buyers decreased slightly and accounted for 57% of all purchasers compared with 61% in 2011.
Buying for residential/sporting reasons is still a significant motive and represented 23% of purchasers in the first half of 2012, down from 25% in 2011.
Meanwhile, purchasing for investment has increased with 27% of purchasers citing this as their reason for buying compared with 17% in 2011.
