Farmland sales fall to five-year low amid economic uncertainty
PUBLISHED: 10:28 01 August 2019 | UPDATED: 10:28 01 August 2019
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Economic uncertainty has driven a decline in the amount of farmland being offered for sale, said rural agents.
Property specialists at Strutt and Parker said the volume of land which came on to the open market during the first six months of the year was the lowest for five years across England, with supply below average in East Anglia.
Head of estate and farm agency Michael Fiddes said: "Spring is traditionally one of the most popular times to launch a farm for sale, but while Q2 was busier than Q1, supply is historically tight.
"The fall is not unexpected as landowners who have a choice about when to sell are holding back until there is greater economic certainty. This is something we have seen during previous rounds of CAP [the EU's Common Agricultural Policy] reform, where uncertainty about agricultural policy has led to a fall in the amount of land being marketed."
Mr Fiddes said tight supplies are helping to keep national average values consistent at around £9,100 per acre for arable land, however there is a wide range of prices this quarter ranging from £6,000 to £16,000 per acre.
"Overall, farms and estates where there is potential to generate mixed revenue streams, combining residential, commercial and agricultural enterprises, are tending to attract strong interest, as are best-in-class farms where there is a neighbouring farmer looking to expand," he said.
Giles Allen, senior associate director for the firm's eastern estates and farm agency, said access to irrigation water was a major factor in the demand for land in East Anglia.
"We have seen a wide selection of farms and blocks of land come to the market in East Anglia this spring, but it is notable that none has been bigger than 750 acres," he said.
"Values are holding firm - prices for arable land continue to range between £7,000 and £10,000 per acre, with location, soil type and water availability being the critical factors in determining which farms achieve the best prices.
"We are currently selling 300 acres of light land and grass that comes with a large abstraction licence which has sparked good interest with competitive bidding and we expect the sale to conclude quickly. It proves that landowners and farmers are conscious that security of water supply can be key to profitability as it allows greater flexibility of cropping and means there is considerable demand for irrigated light and flexible land, with the resulting values being at a considerable premium to the rest of the arable land market."