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Land values increase by just one per cent
FARMLAND values in England rose by just one per cent in the third quarter with equipped farms now averaging £10,300 per acre and bare land around £7,200 per acre.
According to Smiths Gore, 30 per cent more land was marketed compared to the same period last year. However, it said there was some anecdotal evidence to suggest landowners may be concerned about the potential effects of the CAP reform; the threat of capital taxation on land if there is a change of government; and landowners wanting to capitalise on the high values still being achieved for prime farmland.
The 8,900 acres of bare land marketed was double the 4,100 acres in the same quarter last year and equipped land (farms with buildings) totalled 26,700 acres compared with 23,400 acres at the same time last year. The combined total of 35,600 acres was 30 per cent up on the 27,400 acres in 2012’s third quarter.
The company now expects the total amount marketed at the end of the year to be on a par with the 2010/2011 figures.
Dr Jason Beedell, head of research at Smiths Gore, said: “Despite the relative increase in supply, large blocks of land continue to be a rare commodity; only three properties over 750 acres were marketed in the last quarter – one arable farm and two mixed farms.
Only five dairy farms were publicly marketed, of which only two were over 250 acres.”
Regional variations continued with South Central and the South-West marketing the most farms – 42 and 46 respectively totalling 6,400 and 6,200 acres. The South-East had the least acreage – 12 farms totalling 1600 acres.
The North-East had the least number of farms – ten totalling 2,500 acres – compared to six and 1,000 acres in the same quarter last year.
Yorkshire and Humber’s 27 farms totalled 4,100 acres, compared to 16 farms and 2,500 acres in the same quarter last year, and the North-West’s 18 farms totalling 3,700 acres compared to the previous third quarter’s 21 farms and 2,500 acres.
Dr Beedell said: “The stability of land as an asset class has not gone unnoticed by investors, particularly in light of the economic turmoil which has heavily impacted the returns of other property related asset classes.
“According to our Smiths Gore Farmland Market Model, we are expecting a seven per cent rise in values this year which is hardly surprising considering investors are unlikely to exit an asset class that continues to show both positive capital and income growth.”
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