Private sales on rise in variable land market
Low supply, varied demand and uncertainty related to the potential impact of Brexit and COVID-19 continue to shape the land market in England.
Key messages:
- 2020 likely to see the lowest amount of land publicly marketed on record
- Private sales becoming an increasingly large part of the land market
- Lack of supply continues to push up average prices, but the large differences between top and bottom prices remain due to variable levels of demand.
According to analysis of the Strutt & Parker Farmland Database, which records the details of all blocks of publicly marketed farmland over 100 acres in size, just 46,000 acres of land have been launched on the open market in England so far this year, which is well below the five-year average.
With relatively little land expected to come forward in the latter part of the year, it is now inevitable that 2020 will see the lowest amount of land publicly marketed on record.
In total, just 152 farms have been publicly marketed to date in 2020, which is 25% fewer farms for sale than in 2019 and 23% fewer than the five-year average.
Greater % of land for sale privately
In our experience, some sellers are choosing to hold back from the market until we are past the worst of the COVID-19 crisis. However, others who had previously intended to sell on the open market, are choosing to market privately instead.
We estimate that private sales are growing, currently accounting for as much as 35-40% of farms and estates changing hands. What is not clear is whether this year is a one-off because of COVID-19, or a sign of things to come in the future.
Demand for land
Most farms that have been marketed are selling, although demand can be varied, depending on whether there is a local farmer-buyer or if the land has a broader appeal to investors or lifestyle buyers.
Land prices
As a result, there continues to be a significant range in values between the top and bottom of the market, although average prices remain remarkably consistent. The average price of arable land sold so far in 2020 is £9,500/acre (up 5% year-on-year), with the average pasture price at £7,200/acre (up 4% year-on-year).
Read our Autumn 2020 English Estates and Farmland Market Review for further detail on:
- Factors affecting the supply of farmland
- How demand for land is changing
- The wide range in land prices
- Market outlook for farmland sales
