Spotlight:

GB Agricultural Land 2018

GB Agricultural Land
GB Agricultural Land

12 February 2018, by Alex Lawson

What does the future hold for Great Britain’s farmland market?

Foreword

Brexit-related developments continue to dominate market discussion. While Secretary of State Michael Gove provided some comfort to the farming community at the Oxford Farming Conference in January, lingering uncertainty is keeping supply constrained and average pricing marginally subdued. Despite the prevalence of downside risk, we note strong pockets of resilient demand from lifestyle/amenity purchasers as residential farms and trophy estates have performed well when priced at fair value.

 

While some farmland values across Britain continue to be hampered, we believe the trend initially spurred by weakness in commodity pricing during 2014 is slowing. Our most recent Farmland Value Survey revealed an average fall of around only 2% year on year across all land types and geographies. Disparity is evident, with some more commercial areas and lesser quality properties seeing greater falls than others. Yet, in certain circumstances, excellent sale results are and will continue to be achieved.

We are confident on the market’s longer-term fundamentals and expect dynamics to firm up as the outcome of Brexit further materialises. GB farmland remains an attractive investment proposition, buoyant against inflation with realisable upside from a return to capital uplift and further enhancement from diversification and/or development windfall.

Articles from Spotlight: GB Agricultural Land 2018

Market update

12 February 2018

Market update

Short-term uncertainty lingers, but markets are likely to strengthen over the next five years. Holdings with a range of income streams will be sought after, while commercial units with little scope to diversify could encounter further downside risk

How UK farmland sizes up

12 February 2018

How UK farmland sizes up

With a large area of farmland and high domestic demand, the UK has the means post-Brexit to boost production and reduce dependency on imports

Outlook and historical context

While pure commercial holdings are at risk from any reduction in farm earnings, we forecast rising values for those with options to diversify. Is there anything we can learn from historic trends? We examine the events that shaped farmland values

Farmland rents

12 February 2018

Farmland rents

The rental market remained subdued during 2017, in keeping with the longer-term downtrend in the size and frequency of reviews undertaken

Four for the future

12 February 2018

Four for the future

Given the uncertainty and associated risk over the next five years, land managers should assess their respective exposure to a decline in farm earnings. Our research has flagged four short- and long-term levers to protect investment returns

 
 

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Key contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

Alex Lawson

Alex Lawson

Director
National Farms and Estates

Savills Margaret Street

+44 (0) 20 7409 8882