New figures show farmland value is at an all time high

First published in Farming Darlington and Stockton Times: Photograph of the Author by

THE value of farmland reached an all time high of more than £10,000 an acre in the second quarter of the year.

The value of equipped land – with a house and/ or buildings – rose two per cent to average £11,000 an acre. Bare land values also rose two per cent to £7,200 an acre – returning to the levels of Q3, 2013.

Smiths Gore, who produce the Farmland Market Model, expect values to stay at similar levels for the foreseeable future.

However, it said the supply of land in the North- East remains tight with just 2,000 acres marketed in Q2 compared to 6,700 acres in the same period last year.

Simon Bainbridge, of Smiths Gore’s Darlington office, said investors continue to put money into the “safe haven” of farmland and its tax advantages.

“But farmers remain the dominant, if slightly more cautious, buyers which makes lotting and marketing land attractively even more important than usual,”

he said. “Demand from both investors and farmer buyers is supporting competition for land and driving capital growth.”

The total amount of land for sale in England in Q2 stood at 57,000 acres - 1,000 acres more than a year ago.

It included 211 equipped farms with 47,200 acres and 78 with 9,900 acres of bare land.

In the year to date only 68,200 acres have been advertised, compared to 73,500 acres in 2013, which has exacerbated the demand and competition for land.

Mr Bainbridge said: “There is definitely a preference for bare land or equipped farms without significant principal dwellings which was supported by anecdotal evidence during our sale of Trinley Estate, a well-equipped 1,400 acre farming estate in Hampshire with 12 cottages but no principal house.”

Dr Jason Beedell, head of research at Smiths Gore, said there had been more larger farms and blocks of land for sale, 60 properties over 250 acres in Q2, compared with 53 a year ago and 45 in 2012.

There continues to be significant variation in regional markets. The South West and East of England were the most active during Q2, accounting for more than 40 per cent of the land marketed. In both regions supply was higher than the previous two years when activity was particularly low.

Looking ahead, the report said the improving economy was likely to strengthen demand from investors. However farmers are likely to be affected by a slight reduction in farm incomes and profits when interest rates begin to rise.

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