Arable land values in East steady during second quarter of 2017
- Credit: James Bass
Farmland values across the UK saw minimal movement during the second quarter of 2017, according to data from property consultancy Carter Jonas.
The firm says that a lack of supply in the most sought-after areas is one of the key factors behind the stabilisation in values, following a significant fall in prices during the summer and autumn of last year.
However, while the market during the last three months was relatively quiet, Carter Jonas says some transactions are still taking place, despite uncertainty in the sector, with “hotspots” still evident in every region.
Jack Cook, rural surveyor at Carter Jonas in the East, said: “Land in the East continues to hold its value, recording strong prices per acre, which is largely driven by a relatively low supply of stock coming to the market this year.
“As with the rest of the country, the eastern market continues to be especially location driven; farms will need to demonstrate extra commercial value in order to attract buyers from further afield. This is re-enforcing the two-tier market we have seen over the last 12 months.
“The market is currently dominated by large estate owners and rollover buyers who are looking for strategic investments, with innovatively diversified income streams, to mitigate against the uncertainty in the agriculture sector.
“While sales activity so far has been slower than usual, we expect to see several farms going under offer in the next few months, following particularly long marketing periods.”
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Carter Jonas says that, compared with three years’ ago, land is remaining on the market for longer, with buyers unwilling to rush into a purchase and choosing to hold out for a property that meets all their requirements.
It adds that, in terms of finance, there is evidence to suggest that bank lending for the agricultural sector is increasing, and that lenders are willing to support businesses with a good track record and a robust business plan that can service the debt.
Andrew Fallows, head of rural agency at the firm, said: “While there’s a fair degree of uncertainty, the agriculture sector as a whole has proven to be resilient, and we’re seeing a sturdy market correction that is benefitting, in the short term, from an increase in output commodity prices.”