Farmland values in Britain have shown signs of growth for only the second time since March 2015 and buyers remain active in this property sector, the latest analysis shows.
But up to the end of September, the nation has recorded its lowest number of open farmland launches since 1995, according to the report from real estate advisors Savills.
It says that the combination of political uncertainty and potential changes in agri policy continue to delay decisions to bring land to the market even although September is typically a rebound from the late summer recess.
The latest quarter figures confirm a new record low with supply 40% down on the same period last year and 30% down on the five year average.
Total acres marketed fell to 105,000 acres which is even lower than the acreage recorded in September 2004 at 116,000 acres when uncertainty pre the introduction to the single farm payment affected the market.
The largest differential was a 49% year on year decline in Scotland where 21,214 acres were bought to market, over half the long term average.
However, the report also says that in light of low supply and active demand, green shoots are starting to appear in farmland values. The Farmland Values Survey recorded an average net gain of 0.3% gain across Britain, only the second positive result since the peak of land prices in early 2015.
South West England recorded the largest quarterly increase of 1.2% with East England 0.7% and Scotland 0.5% also registering gains. By land type, prime arable and dairy land showed the strongest value growth of 0.6% and 0.8% respectively.
‘Good quality property and correct pricing which creates competition is generating some good sales at decent prices, but blighted properties or those with over ambitious guide prices are proving challenging to sell,’ said Alex Lawson director of Savills farms and estates team.
‘Such short supply and limited market activity mean that the circumstances of every transaction is different, so it’s incredibly difficult to identify trends,’ he added.
Looking forward, the eventual outcome of Brexit negotiations is expected to increase market activity. Savills says that clarity in the political and economic environment may bring more land to the market as farmers assess renewed business objectives.
It also points out that there will always be a market for good quality farmland from those looking to expand their acreage either through renting, contracting of purchasing. Other land types are also attracting interest as attention is turned to filling environmental offsetting agendas.
