Farmland values across England and Wales were flat in the second quarter of 2017 after falling significantly at the end of last year, the late data shows.
Average arable land values were below £10,000 per acre across the whole of the country and are highest in southern and central England, according to the figures from property consultancy Carter Jonas.
While sales activity in the second quarter was relatively quiet, transactions are still taking place despite continued uncertainty in the sector. Hotspots in each region are still evident, and the lack of supply in the most sought after areas is one of the key factors in stabilising land values, according to the firm’s report.
A breakdown of the figures show that the highest prices per acre are in the South of England at £9,800 for arable and £7,600 for grassland, followed by the central belt at £9,750 and £8,000 respectively.
Arable prices are £9,000 per acre for arable in the rest of England and Wales but there is more of a price range for grassland at £8,000 in the Midlands, £7,000 in the East and Wales, and £6,500 in the North West, the North, and Yorkshire and Humberside.
The report points out that vendors are choosing to keep their assets in whole lots, which traditionally have proved more difficult to sell, due to their higher price tags.
Compared with three years’ ago, stock is remaining on the market for longer periods of time, with discerning buyers still unwilling to rush into a purchase, choosing instead to hold out for the ‘perfect farm’ that will meet all their requirements.
In terms of finance, there is evidence to suggest bank lending for the agricultural sector is increasing, and that lenders are willing to support businesses that can service the debt, with a good track record, and a robust business plan.
‘The second quarter of 2017 has seen the market react to a great level of uncertainty and, as a result, the correction in land values is to be expected,’ said Tim Jones, head of rural at Carter Jonas.
‘Following the recent government pledges on support, it is vital that the agricultural sector prepares itself for the changes that lie ahead, and remains innovative and adaptable in the face of uncertainty,’ he explained.
In a polarised market, land values are under pressure and quality counts for everything, and location is as vital as ever, according to his colleague Andrew Fallows, head of rural agency at Carter Jonas.
‘While there’s a fair degree of uncertainty, the agriculture sector as a whole has proven to be resilient, and we’re seeing a sturdy market correction that is benefitting, in the short term, from an increase in output commodity prices,’ he added.
