Strutt & Parker report shows variability in farmland values
- Credit: Ian Burt
A flurry of farmland sales has reduced the backlog of property left on the market after 2016, said rural property agents – but demand and prices remain highly variable.
A report by Strutt and Parker says there was a significant carryover of land as more than 40pc of the farms launched in 2016 were still available at the end of the year, which is a 'far higher proportion than previously seen'.
Michael Fiddes, the firm's head of estates and farm agency, said: 'However, there has been a flurry of activity since Christmas, so a considerable amount of this has now gone under offer. A quarter of the land launched in Q1 of 2017 also looks to have found a buyer.
'This is encouraging and suggests that buyers remain confident about land as a long-term investment, although it is now taking longer to get sales to the point of completion. Buyers are being more cautious than they were when there was greater competition in the marketplace.
'Our analysis also shows that over half of the livestock and residential farms put on the market last year are still available or have been withdrawn, which is a higher proportion than for other types of farms.'
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Mr Fiddes said, based on the transactions in Strutt and Parker's Farmland Database, the average price of arable farmland sold in the first quarter of this year was £9,800 per acre. However, if three sales which took place under 'exceptional circumstances' and achieved £15,000 per acre were excluded, the average was £8,400 per acre.
'However, prices remain highly variable,' he said. 'A better measure, that shows the variability that an average can hide, is that almost 40pc of arable sales were for £6-8,000 per acre, with most of the rest selling for over £10,000 per acre.
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'This highlights how polarised the market has become with strong prices still being achieved where there is both a committed buyer and a vendor with a farm that is attractive to the market.'
In the East of England, the average price of farmland is £8,500 per acre, and agents said 2017 started on a 'positive note' with buyers now prepared to move forward – 'albeit paying prices which are typically 5pc to 10pc lower than a year ago'.