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Farmland values dip slightly but still ahead of five years ago

Farmland values in England and Wales have dipped marginally but are still 10% above the level they achieved five years ago, the latest sector figures show.

Arable land averaged £8,564 per acre, but this was a fall of 1.2% quarter on quarter and down 4.7% over the last 12 months, according to the index from national property consultancy Carter Jonas covering the third quarter of 2019.

Pasture land recorded a marginal increase of 0.8% over the quarter but a decrease of 0.2% year on year, averaging £6,831 per acre.

The index report points out that supply remains low, with around 110,000 acres forecast to come to the market by the end of 2019.

And despite these short term fluctuations farmland values across England and Wales are still 10% above levels achieved five years ago.

As at the end of September 2019, publicly marketed land across the UK was around 83,000 acres this year, a 40% decrease compared with the same period last year.

Carter Jonas forecasts that supply levels are only likely to reach 110,000 by the end of 2019, which is well below the previous low in 2014. However, this could be drastically different come the next Brexit deadline on 31 October.

‘It is hard to know how the market will react when we leave the European Union on 31 October, with or without a deal, so our forecast could change significantly,’ said Andrew Fallows, head of rural agency at Carter Jonas.

‘The uncertainty means that some buyers are unwilling to make large capital investments but there are still motivated individuals around. These buyers are more discerning, but the limited supply of land means that parts of the market are relatively robust as a result,’ he pointed out.

‘Pricing is very much location dependent, but parcels of land with good access and assets with alternative income streams are still sought after and attracting strong interest. Since the relaxation of permitted development rights, the conversion of farm buildings to residential, office, light industrial and even energy generation has proved attractive as a way of securing non-farming revenue at a time of uncertainty,’ he added.