Just 38% of farms and land sold in England and Scotland this year has been bought by farmers.
This represents a drop of nearly 20% year-on-year according to statistics seen by Farmers Weekly.
Data from Strutt & Parker to September shows sales to private investors have jumped from 10% in 2014 to 23%.
Farm income pressure could explain the change in buyer profile, said Tom Raynham, head of agricultural investment at Knight Frank.
“Over the past three years, farmers have been hit by fluctuating commodity prices that have affected their bottom line,” Mr Raynham said. But he added that farmer-buyers were still bidding, even if they weren’t winning.”
Less spending power
“In farms I have bid for on behalf of an investor, the competing bids are from local farmers, so it is not that they have dropped away, it is that they may have less spending power,” said Mr Raynham.
Will Whitaker, a partner Strutt & Parker, said the 2015 statistics could include a number of deals struck late in 2014 that were concluded in the new year. He added that 20% of transactions this year could not be attributed to any particular buyer profile, so the data could not give the full picture.
Alex Lawson, director of farm and estate sales at Savills, said his company’s research also showed a shift – albeit marginal – to more non-farmer-buyers, such as private investors and lifestyle buyers, in 2015.
“Those actively farming the land have traditionally made up about 50% of the buyer profile,” he said. “In the past 10 years, active farmers have got up to about 60%. They are now somewhere just below 50% for this year to date.
“It is not surprising when residential markets are recovering and farmland becomes more attractive if it has a residential property with it, and it also coincides with commodity prices taking a plunge,” said Mr Lawson.
Anecdotally, agents working across England and Scotland agree that the buyer profile is changing, but that the situation varies regionally.
Robert Fairey, partner at Brown & Co in Suffolk, said: “Generally farmers have only been prepared to buy at lower prices due to the commodity price downturn, but where there is no competition they are still buying, although not as much as last year.”
Cundalls director Tom Watson, who operates in the north of England, added that farmland was still viewed as a prime investment opportunity.
“We have not seen demand from investors reduce – indeed in the past 12-24 months, investment buyers have continued to prop up the market.
“While interest rates are low, and with the changing dynamics of the high street and commercial property market, we feel investment buyers still see land as a safe investment in the long term.”
Charlotte Rogerson, chartered surveyor at Berrys, said she had seen signs of change in the estates market.
She said large Shropshire estates that would traditionally take up to 18 months to sell were being snapped up.
“Over this past quarter we have seen some market transactions where estates have been put on the market and an offer for the whole accepted within a month. “Whether this is due to case-specific factors or an indication of a changing market is unknown, but it is very interesting.”