Farmland market remains ‘resilient’ despite Brexit and coronavirus uncertainties
- Credit: Richard Marsham
Farmland values in the East of England have remained strong despite an increasingly uncertain economic and political backdrop, said rural property agents.
The Savills Farmland Values Survey for the third quarter of this year shows that land values have stayed “robust” with minimal changes, although prices remain highly localised and are primarily driven by location, asset quality and soil type.
Christopher Miles, who leads the rural agency team for Savills in the East of England and is based in the firm’s Norwich office, said he expects strong demand to continue in the coming months.
“There is no doubt that a combination of Brexit, agricultural policy reform and the Covid-19 pandemic has had an impact,” he said. “However prices have remained resilient and there is genuine confidence among buyers and real strength in the market.
“Limited stock and high demand has created the perfect environment for those hoping to sell.
READ MORE: Deal or no deal - how can East Anglia’s farmers prepare for the EU transition?“Looking ahead, the sector is set for radical change, with trade and policy reform expected to develop in detail before the year end. However, times of economic uncertainty have traditionally proven fruitful for farmland investors and our analysis shows in the seven years following the global financial crisis farmland outperformed UK equities, gold and bonds.
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“As a result we expect the demand fundamentals to remain strong and the market steady. Momentum behind a ‘green recovery’ is likely to complement this, as society and governments recognise the importance of the land-based sector in mitigating the effects of climate change.”
Mr Miles said private and off-market sales have been a popular avenue for many vendors, and significant recent deals showed that buyers are willing to pay for property deemed “best in class”.
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He added: “A 498-acre property near Norwich with a guide price of £6.5m has recently been sold subject to contract for example, while in Cambridgeshire the Whitleather Estate also proved popular for its renewable energy income.
“There continues to be a remarkable uptick in interest for houses in the country and amenity farmland as many urban-based buyers seek more green space. Rural estates with notable residential components, such as the Wood Hall Estate near Downham Market, are also attracting interest at the higher end of the market, while greenfield land with forestry planting potential shows natural capital motives are beginning to gain traction.”
READ MORE: A rare ‘Downton Abbey’ estate in 600 acres goes up for saleAccording to Savills database – which tracks sales of more than 50 acres – 95,160 acres of farmland were brought to the public market nationally by the end of September. Over half of this activity occurred between July and the start of October. Great Britain’s average “all types” farmland indicator remains unchanged at £6,690 per acre, with prime arable down 0.1pc to £8,690 per acre. Grade 3 arable land was up 0.2pc to £7,323 per acre while Grade 3 pasture land was unchanged at £5,384 per acre.