Farmland prices ‘5% to 10% lower than a year ago’, says Strutt & Parker
Prices paid for farms have been highly variable across the UK in recent months, according to latest figures from estate agents Strutt & Parker.
In the East of England, arable land changing hands in the first quarter of 2017 achieved priced ranging from £7,000 an acre in the bottom quarter to £9,500 in the top, making for an average of around £8,500, it said.
Tim Fagan, who operates in the firm’s eastern region, said 2017 had started on a positive note.
“Buyers are now prepared to move forward, albeit paying prices which are typically 5% to 10% lower than a year ago,” he said.
“There are two commercial farms, a residential estate and several blocks of land due to come to the market this spring and we predict several more will be available by early summer.”
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Michael Fiddes, head of estates and farm agency, said the year had started unusually.
“There was a significant carryover of land on the market – over 40% of the farms launched in 2016 were still available at the end of the year, which is a far higher proportion than we have seen before,” he said.
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“However, there has been a flurry of activity since Christmas, so a considerable amount of this has now gone under offer. A quarter of the land launched in Q1 of 2017 also looks to have found a buyer.
“This is encouraging and suggests that buyers remain confident about land as a long-term investment, although it is now taking longer to get sales to the point of completion.
“Buyers are being more cautious than they were when there was greater competition in the marketplace.
“Our analysis also shows that over half of the livestock and residential farms put on the market last year are still available or have been withdrawn, which is a higher proportion than for other types of farms.”
Mr Fiddes said based on the transactions in Strutt & Parker’s Farmland Database, the average price of arable farmland sold in the first quarter was £9,800/acre.
However, if three sales which took place under exceptional circumstances and achieved £15,000/acre were excluded, the average was £8,400/acre.
“A better measure, that shows the variability that an average can hide, is that almost 40% of arable sales were for £6-8,000/acre, with most of the rest selling for over £10,000/acre,” he said.