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Farmland market now dominated by non-farming investors, says report

PUBLISHED: 09:51 25 January 2019 | UPDATED: 10:11 25 January 2019

Non-farming investors now account for more than half of farmland sales, said property agents. Picture: Nick Butcher

Non-farming investors now account for more than half of farmland sales, said property agents. Picture: Nick Butcher

Archant © 2018

Farmers now account for less than half of purchases in a farmland market dominated by lifestyle buyers and investors, according to property agents.

The Strutt and Parker Farmland Database shows the average price of arable land in England rose by 2pc in 2018 to £9,400 per acre – with those values supported by growing interest from non-farmers.

The firm’s head of estate and farm agency, Michael Fiddes, said: “Our data confirms that over the past two years non-farmers have played an increasing role in the market.

“Land in the right location remains in considerable demand for capital investment for many non-farming reasons, including development potential, privacy, tax reasons, or amenity. For many of these investors, generating profits from farming is not their primary focus.

“For the first time since we started compiling detailed records in 1996, farmers accounted for less than half of the buyers in 2018.

“Conscious of the likely squeeze on farm profitability going forward, farmers are finding it more difficult to justify buying land funded by borrowings so are taking a more cautious approach.

“However, the most entrepreneurial farmers remain in the market for more land if it is in the right location and at the right price.”

In the East of England, there was an increase in the acreage of land available in 2018, which can mostly be attributed to the sale of a few large farms, said Giles Allen, an associate director in the firm’s eastern estates and farm agency.

“Farms are finding buyers - a mix of farmers and investors – albeit, there are differing levels of interest according to location, with demand tending to be stronger for farms in the southern half of the region,” he said.

“Overall, prices are typically between £8,000 to 9,000 per acre, with a handful of exceptional sales going through at up to £11,000 per acre. Meanwhile, land in the more inaccessible parts of the region, is attracting bids of £6,000-£8,000 per acre.

“In such a variable market, the key to a successful sale is local knowledge.”

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