The farmland market has proved far more resilient than many had predicted over the last 12 months considering the Brexit related uncertainty and the issues caused by the weather last year. The supply of land on the market in the North West has failed to dampen or fill the level of demand from a wide range of buyers. Land in the right location remains in considerable demand but not always from the existing farmers. Non-farmer demand has and continues to rise for a range of reasons such as development potential, taxation reasons and amenity who are less reliant on borrowing and finance to fund purchases. There is however a continuing widening between the prime land and secondary, poorer land in secondary locations which is becoming harder to place to the discerning buyer.
Here at Armitstead Barnett we have been very busy selling and agreeing sales on more than 800 acres in Lancashire and Cumbria on the market and privately, the buyers being a mixture of existing farmers and taxation driven buyers. Interestingly Brexit and the current farming conditions seem to have little influence on the buyer’s decision making. The old saying is that they are not making any more land, indeed for the last 20 years the UK as a whole has lost on average 26,000 hectares per year to non-farming activities and the agricultural area of the UK now stands at about 72% of the total area of land so opportunities to add or replace lost land rarely come around which influences buyers rather than shorter term issues such as Brexit.
Overall the bare land market is still very strong in the North West with Grade 2 and Grade 3 land in the right location achieving and, in some cases, exceeding £10,000 per acre, Grade 1 land in some notable locations can be achieving between £10,000 – £15,000 per acre. Conversely, poorer located Grade 3 and Grade 4 land can struggle to achieve £6,000 per acre, as ever, its location that is the key to the demand and values.
The prediction for the remainder of 2019 still appears to be positive despite economic uncertainties, the location of the land being one of the key criteria. The gap between the best and secondary land will continue to widen with some possible erosion of capital value for secondary land.
For further advice relating to rural property and farms contact Richard Furnival.