UK farmland values are on course for a 10th consecutive year of annual growth and set to grow further, an agribusiness expert in Savills Cambridge has forecast.The prediction follows a 3.9 per cent increase for all land types during the first six months of 2012. In the short to medium term, growth – while still significant – is forecast to be less dramatic than that recorded during the past five to 10 years at around five per cent per annum.
Adrian Wilson, head of farm agency for Savills in Cambridge, said: “Many farmers have watched their property’s value double or even treble during the past few years and for some this represents a good opportunity to cash in on the strong market and take advantage of the relatively low value of some other investments classes.”
Closer analysis shows the highest rates of growth during the first half of this year were recorded in the arable sector across the eastern counties of England, where the demand for large blocks of productive land continues.
Prime arable land increased by eight per cent in the East Midlands and 2.9 per cent in East Anglia to average £7,500 per acre and £7,636 per acre, respectively.
On the supply side, in England the number of acres openly marketed between January and July fell by 14 per cent to 58,768 acres compared to the same period last year. However, there have been a number of private transactions of substantial acreages.
Farmers continue to be the highest proportion of traders of land – representing over 50 per cent of buyers and sellers. In terms of reasons to purchase, investment is given as the reason in 27 per cent of all purchases, which is an increase on last year, while relocation represents almost 10 per cent of all purchases.
One of the main reasons for selling remains off-farm investment at 36 per cent while debt related sales continues to represent a small proportion of sellers at 11 per cent.
Wilson again: “The safe haven status UK farmland has earned, combined with the various tax saving advantages which may be open to a landowner is encouraging a wide range of individuals and corporations to look at purchasing land. Often the biggest barrier to doing so is finding large enough blocks in the right locations.”
• PHOTOGRAPH SHOWS: Adrian Wilson