East of England farmland prices expected to fall over next 12 months

East of England farmland prices are expected to dip further. Picture: ZOONAR/S HEAP

East of England farmland prices are expected to dip further. Picture: ZOONAR/S HEAP - Credit: Getty Images/Zoonar RF

Farmland prices in the East of England reportedly dipped in the second half of last year, even though nationally they rose slightly, figures reveal.

Nationally, surveyors expect farmland prices to continue to fall this year - even with supply drying up, a Royal Institution of Chartered Surveyors (RICS)/Royal Agricultural University (RAU) UK Rural Land Market Survey found.

Their study of the second half of 2017 found prices falling slightly in the East of England compared to a year earlier, with the average price per acre of arable land at £8,620 and the average for pastureland at £4,500.

Across the UK, the prices were provisionally at £8,433 for arable, and £6,436 for pasture.

Giles Allen, of Strutt and Parker’s Ipswich office, said: “Land values have been largely maintained due to lower levels of supply and continuing sustained demand. Although most farms are selling, the market remains price sensitive, with access and quality also key factors.”

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Brexit was less of a direct issue currently, he said, but was probably affecting supply levels, and both are likely to affect values in the future.

In the east region, 20% more respondents envisage prices of farmland falling rather than rising in the 12 months ahead, the survey found, with those polled equally negative about land with a residential element and land used for commercial purposes only.

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Meanwhile the availability of farmland for sale in the region continued to decline over the second half of last year, extending a trend present since the second half of 2016, in the east region.

Both residential and commercial units saw supply decline in equal measure in the latter part of 2017 with eastern surveyors citing the lack of supply as a major issue, and Brexit cited as a contributing factor.

But following a three-year period in which demand has deteriorated, there was a pick-up in new buyer interest in th east, with 30% more respondents seeing an increase in demand over 2017.

While average arable land rents dipped in the second half of the year, they were still up by 4% on an annual basis. Compared to the 2014 peak however, arable rents remain down by more than 10%.

Ben Taylor of Bidwells in Cambridge said location remained key.

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