Farmland investment continues, despite tight supplies
It’s been a quiet start to the year for England’s farmland market as people wait for greater clarity on Brexit. The amount of land that has been marketed in Q1 has fallen compared with previous years, despite an increase in the average size of farm being marketed. The number of sales completing during the quarter has also gone down, which is partly the result of the more cautious market sentiment, but also a reflection of the lack of land that came forward at the end of 2018.
The small number of sales in Q1 means that average prices need to be treated with caution. According to our data, the average price of arable land sold in Q1 was £9,100/ acre, but with prices ranging from £6,000-16,000/acre. Average pasture values in Q1 2019 were £7,000/acre, ranging from £5,000-8,000/acre. The wide variation in prices paid highlights how complex the farmland market has become, with location being the critical factor driving the level of demand.
However, our teams across the country have seen considerable interest in the 1,900 acres they have launched in England since 1 January 2019, which is spread across four farms and country estates. A good example is a commercial farm in the north west that launched in mid-March and had 15 viewings in the first two weeks of marketing alone. This has been put down to a lack of quality land for sale in the area with a range of interest from local buyers and those from further afield.
Brexit uncertainties may have seen vendors take a more cautious approach, but we are finding that buyers, and particularly those with capital sourced from outside of agriculture, are still keen to invest in farms and estates in the right location.