Brexit uncertainty restricts UK land sales

Charles Dudgeon, head of rural agency at Savills, said there was a historic pattern of low supply before a Common Agricultural Policy (CAP) reform.

“We anticipate this will continue until the outcome for farming post 2019 is known, and as a result, values will hold up in the meantime,” he said.

But post-Brexit he expected there would be an increase in the numbers for sale as had happened following previous reforms.

Enthusiasm

Potential interest rate rises could also ‘dampen buyer enthusiasm’.

Mr Dudgeon said there was a widening divergence of price based on quality.

There was a significant disparity in values between different land types and location. Average quality grassland values were £15,501.72/ha (£6,276/acre) in England, with prime arable achieving £9,046/acre and grade three arable land averaging £19,599.45/ha (£7,935/acre).

In Wales, average quality grassland was £13,093.95/ha (£5,285/acre), £17,290/ha (£7,000/acre) for prime arable with grade three at £14,997.84/ha (£6,072/acre).

Scottish prime arable land on the east could make more than £22,239.48/ha (£9,000/acre), in contrast to £12,350/ha (£5,000/acre) for poorer land elsewhere.

“In a similar vein, quality pasture in productive dairy areas can achieve over £5,000 where demand is strong," he added.

Activity last year was particularly focused in the south west and north east of Scotland with Dumfries and Galloway the only region to see an increase in acres advertised.

And more buyers were attracted from outside of Scotland as buyers searched for value for money, with Irish buyers particularly active in the south west.

Lull

Savills also suggested with the future prosperity of UK agriculture uncertain, there could be a short-term lull in demand for commercial holdings.

But interest in land with high amenity value and scope to diversify should remain strong as these assets provided both a lifestyle and a more diverse means of income generation.

Potential interest rate rises could also ’dampen buyer enthusiasm’.

Mr Dudgeon said banks were also taking a more rigorous approach to lending in the current political climate, which has led to buyers needing more time to prepare offers and deals taking longer to complete.