Wednesday, April 24, 2019

East Anglia accounts for a quarter of all farmland sold in 2018

February 1, 2019 by  
Filed under Property

East Anglia accounted for 25% of the farmland sold in England during 2018, according to latest research from Savills.

A total of 33,200 acres of farmland were marketed in the region last year – compared with 14,100 acres in 2017, an increase of 135%. In Great Britain as a whole, there was an increase in supply of 24% (England 31%) for the same period. 

Savills annual Farmland Value Survey also shows that during 2018 the average value of prime arable land in the Eastern Counties fell by 1.8% to £8,770 per acre.

This compares with an average price decrease for prime arable land across Great Britain of 2% (average £8,760 per acre) for the same period. The average value of grade three livestock land in the Eastern Counties meanwhile remained stable at £4,500 per acre.

Private sales 

Gi Angibau, director of rural agency at the Savills Chelmsford office, said 2018 was characterised by larger lot sizes, often sold privately. Supply was up on 2017 –  particularly in Cambridgeshire and Norfolk, even after accounting for the marketing of Strutt and Parker (Farms) Ltd.

Values were broadly in line with 2017 but with huge variations, particularly for bare land blocks which ranged in value from £7,000/acre to £13,000/acre. Essex commanded the highest average value, reflecting limited supply and the weight of money from development gains.

Ms Angibau said: “Farms with diverse income streams or good infrastructure were most in demand. Unsurprisingly farmers represented a dwindling proportion of buyers with investors, landowners and lifestyle buyers making up the majority.”

Looking forward to the remainder of the year, Savills sees more of the same. Until the political situation regarding Brexit becomes clearer, the agency expects a lower supply of land for the early part of 2019.

Appetite for land

“The key to unlock a market shrouded in both uncertainty and such a range in prices, is knowledge. There is still an appetite for land in the eastern counties but understanding the who, what, and where of this demand is paramount to achieve not only a sale but the best price.” 

The Farmland Value Survey – compiled by Savills Rural Research – also looks at long term trends that might affect the market.

Christopher Miles, director of rural agency at Savills Norwich office, said: “The very fact that prices remained broadly the same – despite the massive increase in supply and uncertainties around Brexit and agricultural subsidies – shows that it remains a favoured investment for many.

“Over the next three to five years we do predict an increase in liquidity and in the longer term there are likely to be some very significant changes in land use driven by environmental and climate change targets.

“We do not anticipate a repeat of the price increase recorded in the decade to 2014, but we do expect the market to return to its long term historical real-term growth of around 1% per annum, ie 1% above inflation.”

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