Supply of farmland shrinks as vendors take a "wait and see" approach
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The year started quietly and has continued that way, with economic and political uncertainty creating an environment in which buyers and vendors are finding it equally difficult to make decisions about the future.
Many landowners who are considering selling appear to have decided they will wait to see the outcome of Brexit before making their minds up to proceed. As a consequence, the first half of 2019 has seen the lowest number of farms for sale in the past five years – with only 115 farms publicly marketed. They cover 43,000 acres, which is also the lowest area marketed since 2014.
But tighter supplies are helping to underpin average values which remain consistent at £9,100/acre for arable land. However, the range in values is as wide as ever – this quarter ranging from £6,000 to £16,000/acre.
Overall, farms and estates where there is potential to generate mixed revenue streams, combining residential, commercial and agricultural enterprises, are tending to attract strong interest, as are best-in-class farms where there is a neighbouring farmer looking to expand. Location remains critical, but buyers are also placing greater emphasis on the quality of the holding than perhaps they were three or four years ago. For example, they are now looking more closely at issues such as accessibility, water availability, soil type and how well the farm has been maintained.
The market is complex, with different factors in play across each region. Knowledge of the local market and the major players in it is essential. Good sales results are achievable, but vendors may need to be patient.