07/27/2021 | Press release | Distributed by Public on 07/27/2021 08:24
After a slow start to the year, the British farmland market has picked up pace over the first six months with good levels of activity for both public and private sales, and notable value increases particularly for amenity and poorer quality farmland.
Our analysis points to early signs that the theme of low supply, which has dominated the farmland market in the last couple of years, is beginning to ease. Fifty eight per cent more farmland was publicly marketed in the first half of 2021 than in H1 2020 (although for obvious reasons that was an exceptional year).
Across Britain, supply to 30 June 2021 is only 8 per cent below the five-year average. This suggests previous uncertainties surrounding trade deals and the Agricultural Transition are making way for renewed confidence, allowing farmers to make informed business decisions. There will be some lead time before this is fully reflected in supply though.
Based on our applicant numbers, demand remains strong. The pool of potential buyers is growing more rapidly than before, with 28 per cent more registered at the half-year point compared with the same period in 2020. There are a number of buyers with rollover funds to invest and commercial farmers seeking quality farms.
According to our research, although values increased for all land types, average livestock and poorer quality livestock land outperformed with 3 per cent and 3.2 per cent growth respectively. This means that values for average livestock land have almost returned to peak levels last seen in 2015.
In part, this may be a result of amenity buyers looking to acquire smaller plots of land fuelled by the pandemic and desire for more outdoor space. The growth in values for livestock land is particularly focused on the South West, which has been a popular area for those seeking to escape the urban life.
With the additional detail of how the farming industry may look over the next few years, we anticipate supply will not increase as fast as originally anticipated. Market outlooks are positive and farmers will take time to process and review how the changes occurring in the industry affect their businesses.
Our expectation is that value drivers will remain largely unchanged, although amenity land is likely to continue to outperform other farmland this year, both because of the continued quest for space and the environmental agenda which is encouraging further investment into rural assets.