Where will land prices go in 2013? We ask agents around the country to sum up the market in 2012 and to set out what will influence buyers, sellers and prices next year.
2012 market – key features
A large variation of farm types, sizes and values came forward in 2012. Residential family farms, of which there was a flush in Suffolk, generally fared less well than commercial silt or large commercial blocks in east Suffolk and Lincolnshire/Cambridgeshire. Essex was generally a thinner market in 2012.
Values achieved ranged dramatically, with some stunning prices paid for high-quality, diverse cropping land with strong neighbour appeal. Good-quality large commercial blocks sold well, most notably the Hengrave Estate.
- Demand generally led by farming industry; investors present, especially for good-quality bare land
- Poorer quality land sold in a good market disappointed
|Sale highlight of the year (pictured above)|
|North Green Farm, near Beccles – a 5,000-acre commercial, Grade 3 cereal and sugar beet farm, with adequate buildings, diverse income (holiday cottages, let residential property) and a moderate farmhouse. Significantly exceeded the arable land guide price of £7,500/acre.|
2013 outlook – main market influences
- Requirement for banks to continue to support agriculture
- 2012 harvest and difficult autumn establishment
- Increased uncertainty of CAP reform
- Underperformance of commercial investment market
- Non-agricultural investment demand
2013 outlook – what will happen to prices?
A growing gulf is developing between land on which genuine money is made (excluding subsidy) and heavy land with restricted cropping ability. We see an increase in value for the former and some disappointing outcomes for the latter. With competition for the former, guide prices have been exceeded by 25% or 30%.
How much land will come on the market in 2013?
It does not look as though supply is going to be very different to 2012, although some high prices in 2012 could tempt more land into the market.
The poor harvest and difficult autumn could bring more land from the smaller family farm sector, also, some tenants are seeking renegotiation or surrender.
Easiest farm to sell in 2013?
A 1,000-acre, well-equipped commercial farm with limited residential value would sell well ahead of expectations. Land quality needs to be good, preferably with secure irrigation and close to major road networks or major towns or cities to enable income diversification.
Most difficult farm to sell in 2013?
The need for additional residential property is limited. This was reflected in small to medium-size farms that came forward in Suffolk with a number of agents.