East Anglia: Farmland prices continuing to rise, Strutt & Parker reports
PUBLISHED: 12:19 12 August 2014 | UPDATED: 12:19 12 August 2014
Farmland prices in East Anglia have continued to rise during the first half of 2014, increasinig by an average of around 10%, according to Strutt & Parker.
The year began with the sale of Nordelph Farm, a block of 1,618 acres of Grade 1 commercial farmland near Downham Market in Norfolk, for well above its guide price of £15.75million.
And this buoyant trend has continued throughout the region, with the sale of several blocks of bare land in west Essex, where price records were broken, and also in Cambridgeshire, Suffolk, Hertfordshire and Norfolk where farms and farmland sold quickly and well, the firm says.
Giles Allen, partner at Strutt & Parker’s office in Ipswich, said: “Our records show that, as we predicted last year, the prices paid for arable land rose by about 10% across the region with average arable land prices now closing in on £10,500/acre, but the range is large from £15,000- £8,000/ acre.
“This figure remains well above the national average of £8,927/acre, as the ‘Grain Basket’ of England continues to benefit from confidence in farming, particularly following a straightforward and heavy harvest.”
He said that Suffolk farmland prices have been amongst the most stable, rising by just 6% to £9.815/acre, although this is likely to increase as farms launched on to the market in the early summer exchange contracts, with blocks of bare land having regularly been making in excess of £11,000/ acre.
The Essex market continued to flourish, with record prices having been achieved in excess of £12,000/acre, he added.
“Farmland values tend to correlate with wheat prices (which are down) and interest rates (which may rise, albeit slightly) and therefore the market may plateau over the second half of 2014,” said Mr Allen. “However, supply remains scarce and for every farm sold, there are generally a good number of under bidders who remain keen to secure a deal.
“Farmers have succeeded in buying land in recent years, but with a slightly more austere short term outlook for farming, we believe the investor, not so reliant on farming incomes, may become even more prevalent in 2014/15.
“There are precious few farms mooted to be coming to the market, so once again rarity will play a key part in the market. Some may prefer to watch and see, but others will keep their hand in, and values will stay level at the very least.”