Expansion is the strongest motive for buying more land, according to the latest issue of Savills Agricultural Land Market Survey.
The presence of non farming lifestyle buyers continues, although the proportion of these buyers making their first land, farm or estate purchase was at its lowest level since 1998 and was significantly less than the peak of 42% in 2004. In most cases last year it was existing landowners buying additional land.
‘The demand for good commercial arable farms, continues to drive the UK farmland market. We currently have well over £6 billion of buyers’ funds registered for a farmland purchase but it is currently impossible to see the level of increase in supply required this year to help satisfy this demand,’ said Alex Lawson, director of Savills Farms and Estates.
After a lull in activity for a few years there was renewed interest from overseas buyers from a wide range of countries from within Europe and further afield.
‘It is also worth noting that the analysis also shows that of all transactions where Savills acted for either the buyer or the seller, approximately one quarter of the total acreage traded with a Savills involvement changed hands privately,’ added Lawson.
In terms of reasons behind a transaction our research suggests more sellers are moving out of farming for personal reasons, while the number relocating has fallen compared with 2011. On the buying side expansion was the main reason in 44% of purchases.
The majority of purchases continue to be predominantly funded by cash, which accounted for the funding behind 70% of all transactions during 2012. Loans or debt as a proportion of funding source remains fairly static at 30%, a figure which is largely unchanged since 2005.
