Land, Farms & Estates Market Update

    Savills latest research examines the farmland market over the whole of 2010 and reveals a year of rising values in the face of tight supply and strong demand.

    The amount of farmland publicly marketed across Great Britain increased by 11% compared with 2009, to 158,000 acres. However, this increase was concentrated in Scotland (where it rose by 35%) and Wales (65%); in England supply remained unchanged, at 107,000 acres.

    The average value of grade 3 arable land across Great Britain increased by 11%, to £5,250 per acre, compared with 7.2% in 2009. But this average conceals regional variations: values increased by 11.7% in England and 5.8% in Scotland, while there was significant growth of 23.5% in the North of England, 18% in the East and 14% in the East Midlands.  That said, we have seen some record prices in the market place and in certain circumstances, prices of £10,000 an acre and more have been achieved.

    This growth was underpinned by continued strong demand. Farmer buyers accounted for 56% of purchasers, compared with 61% in 2009. Institutional and corporate buyers increased to 9.6% (from 3.9% in 2009), suggesting the investors are once again competing with farmers. Indeed, 31% of purchasers cited investment as the reason for buying. With 94.4% of buyers being British, overseas buyers accounted for just 6% of purchasers, compared with 22% in 2006.

    There was little change in seller profile from 2009: 47.5% of vendors were farmers (up from 46.7%), 37.5% were lifestyle landowners (38.3%) and 15% were institutional (14.8%). However, the primary reasons for selling did alter, with more investment-linked sales: 33.3% of sales were in order to invest elsewhere.

    2010’s healthy market in the south west enjoyed an almost perfect balance between supply and demand and circumstances look set fair for this to continue in 2011. We completed a number of notable sales in the last few weeks of 2010 with some commercial blocks of land achieving £7,000/acre. The first few weeks of 2011 have been active and we have already agreed some significant sales which bodes well for anyone considering a sale this year.

     
     

    Key contacts

    Penny Dart

    Penny Dart

    Director
    Rural

    Savills Exeter

    +44 (0) 1392 455 747

    +44 (0) 1392 455 747

     

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