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Currency swings give Eurozone buyers an advantage

Ian Bailey of Savills research comments, "When a € was worth 70p as it towards the end of 2007 an overseas buyer in the eurozone needed to spend €6,200 to buy land at £5,000 per acre, whereas now, with sterling much weaker at around 90p/€ today, farmland is significantly discounted.

A shift from 70p/€ to 90p/€ will give a 22% improvement, and at parity the saving will be considerable at 30% giving around a 10% saving for each 10p weakening of the pound.

Christopher Miles, Savills comments, "There has been a big influx of overseas buyers in the past two or three years, who were attracted by the price differential between UK farmland and their own, but last year when average values rose by 21% this differential was eroded. This year however exchange rates make UK farmland look attractive again".

Overseas buyers have been a significant and important source of demand for many years. Our research, back to 1995, shows that buyers from overseas, mainly Europe but also including America and Australia, have had a presence in our market every year except 2001, the year of the Foot and Mouth disease outbreak.

Until 2003 overseas buyers represented somewhere between 1% and 6% of UK farm buyers. However, in the past six years this proportion has increased to between 10% and 20% of all buyers of farms over 50 acres.

In 2008 the Danes and Irish (mainly from Northern Ireland) represented 9.4% and 4.2% of all buyers, comparable with their activity in 2007.

Miles again, "Now the biggest frustration for any potential buyers looking to take advantage of current exchange rates at the moment is likely to be the lack of acres available to buy."