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Tight supply sees land prices hold steady despite Brexit uncertainty
Land prices have held firm on the back of swirling political uncertainty which has seen less land come to market.
Olivia Midgley
The average price of bare agricultural land in England and Wales fell by 0.8 per cent in the third quarter of the year to £6,975/acre, taking the total decline over the past 12 months to 1 per cent.
According to Knight Frank’s latest farmland index, prices are still 40 per cent higher than they were 10 years ago.
Andrew Shirley, head of rural research at Knight Frank, said: “Given the current two big issues facing the agricultural sector, falling commodity prices and continued Brexit uncertainty, an annual fall of just 1 per cent seems a remarkably resilient performance.
“Robust demand and limited supply help to explain why the market remains relatively steady.”
Carter Jonas noted a 40 per cent decrease in the amount of land marketed across the UK in September this year compared with the same period in 2018.
Records
Savills noted the lowest number of open market farmland launches in Scotland since company records began in 1995.
However, Andrew Fallows, head of rural agency, Carter Jonas, said this could change drastically after October 31.
He said: “The uncertainty means some buyers are unwilling to make large capital investments but there are still motivated individuals around.”
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Mr Fallows said the relaxation of permitted development rights had also made converting farm buildings to offices and industrial units an attractive proposition as farmers looked to secure non-farming revenue after Brexit.
Savills said buyers in Scotland remained active, adding farmland values had shown signs of growth for only the second time since March 2015.
In the last quarter the Scottish land supply was down by almost 50 per cent.
Evelyn Channing, Savills Head of Farm Agency in Scotland added: “Brexit uncertainty is impacting supply in Scotland, and this is resulting in strong competition for the best land at prices above expectations.
"In contrast, poorer quality land is not being chased to the same extent or as aggressively. Our analysis of the market suggests that half the farms offered for sale in Scotland currently remain unsold.”
Total GB acres marketed fell to 105,000 acres, which is even lower than the 116,000 acres recorded in September 2004 when uncertainty prior to the introduction to the single farm payment affected the market.
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