England’s farmland market is busier than it has been for some time, with many farms and estates attracting multiple bidders and selling for more than their guide price.
Matthew Sudlow, head of estates and farm agency at land and property specialists Strutt & Parker, says the market is more active than it has been for four years. Demand is generally outstripping supply, he adds.
“It is not only the housing market that is busier than it has been for years, our agents involved with selling and buying farms and estates are also seeing strong demand. We are currently seeing multiple buyers for most of the farms we are selling.
“Some prime properties are sparking bidding wars and selling for well in excess of their guide price. We have even seen some examples of gazumping, which is something we have not seen in the farmland market for the past five years.”
One farm marketed recently by Strutt & Parker attracted bids from 31 bidders and went under offer for £1m more than its guide price. Another farm went under offer within a week of it being put on the private market.
“Over 70% of farms and estates that have sold in recent months have exchanged hands for more than their guide. One of the factors behind this is the wide range of buyers currently looking for land.”
Farmers, lifestyle buyers, private and green investors are all in the mix, says Mr Sudlow.
Strutt & Parker’s Farmland Database, which records the details of all farms, estates and blocks of publicly marketed farmland in England over 100 acres in size, shows 30,400ha of farmland came to the open market in the second quarter of 2021
This was well up on the 5,800 acres marketed in the first quarter, although cumulatively the first half of the year is still below the five-year average. In total, 110 farms were publicly marketed during the first half of the year – just below the five-year average of 120.
But a significant amount of land is being marketed privately, with private sales now estimated to account for up to 50% of land sold in some regions. This means supply is higher than it first appears, although in historical terms total volumes are still low.
The range of prices paid for both arable and pasture land remains large. Land achieving the highest prices tends to be in areas popular with lifestyle buyers or private investors, such as south-east England and the Cotswolds.
The proportion of farms bought by lifestyle buyers and private investors rose to its highest level on record – accounting for 45% of transactions in 2020. Non-farmers are now the main type of buyer in the south east and south west of England.
Arable land has sold for between £6,800 and £15,800/acre across the first six months of 2021 (H1), with a Q2 average of £9,000/acre. Pasture has sold for between £3,000 and £10,000/acre in H1, with an average of £7,100/acre.