The farmland market has proved far more resilient than many had predicted over the last 12 months, considering Brexit related uncertainty and the issues caused by the weather last year.
Despite an overall increase in supply of UK farmland in the market, the average values have remained stable. This is an overall statement of the UK and as ever, there are plenty of regional variances. In the North West, the supply of land on the market 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 farmer. Non-farmer demand has risen and continues to rise for a range of reasons such as development potential, taxation reasons and amenity; these buyers being less reliant on borrowing to fund purchases. There is, however, a continuing widening of the gap between the prime land and secondary land. Poorer land in secondary locations is becoming harder to place to the discerning buyer.
The 2019 North West land market has been slow to start but here at Armitstead Barnett we continue to be very busy agreeing sales on more than 500 acres in Lancashire and Cumbria; off 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 in buyers’ decision-making process.
The old saying is that “they are not making any more land.” Indeed, for the last 20 years, the UK has lost, on average 26,000 hectares per year to non-farming activities. The agricultural area of the UK now stands at around 72% of the total area of land. As a result, it is the opportunity to add or replace lost land that rarely comes around, which influences buyers at present rather than the 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 regularly 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 being key to the demand and values.
The prediction for the reminder of the year 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 our Professional Partner:
Richard D Furnival BSC Hons MRICS FAAV
01995 603 180