Following a quiet first quarter with weather conditions holding back sales, Alex Black reports on the trends driving the farmland markets.
Difficult weather conditions around the UK are affecting markets across the agricultural industry, with the property market also feeling the pinch.
Confident buyers are the key driver behind any positive market but the wet weather in spring seriously dented farmers’ confidence with many reluctant to make a move.
While non-farming buyers were still keen, it has also affected the amount of farms and land coming to market with sellers cautious of having photographs or sales details prepared in the poor weather.
But stability appears to have returned to the market following a quiet first quarter, according to property consultancy Carter Jonas.
Land values are down by 1.3 per cent on the year but there is an increase in the volume of farmland coming to market.
There is continued uncertainty surrounding Brexit but evidence suggests the impact on sales is diminished in some cases. While some vendors, particularly of larger assets, continue to sell due to concerns about the lack of Government support and profitability, pragmatic buyers remain ambitious and continue to unlock strategic opportunities in the market.
Andrew Fallows, Carter Jonas head of rural agency, says the increase in the volume of transactions and the values achieved are promising for the market, indicating stability after ‘18 months of flux’.
“Indeed, we can feasibly anticipate the brief period of declining land values has passed,” he says.
“It goes without saying Brexit has exerted certain pressures on the agricultural sector since the referendum two years ago, but this quarter’s figures indicate, for the first time, that landowners have resolved to plough forth regardless.
“While some are still waiting for clarity from Michael Gove on the Agricultural Bill, it would appear the farming community is starting to acclimatise to the protracted uncertainty and is ready to progress forward where possible.”
And while currency should make farms more attractive to overseas buyers, this demand is being limited by the uncertainty over the political situation.
Markets remain a ‘postcode’ lottery with huge variations in selling prices dependent on land type and location.
Buyers with rollover funds they want to invest into farmland are the driving force in many regions, particularly in parts of the Midlands and the South East in response to a significant growth in housing development and infrastructure projects.
Lifestyle buyers also remain active players in the market, with sellers advised to consider dividing their farm into lots to attract demand from buyers looking for residential property without a substantial amount of farmland and those looking to expand their own businesses through the purchase of bare land.