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
Arable farmers in some areas may have had an appalling harvest in 2012, but one poor summer is unlikely to dent the bare land market. However, the wet weather experienced at the end of 2012 could affect the types of buyers of farmland in 2013.
Off-market sales have become increasingly popular as a result of vendors and buyers wanting greater privacy. In 2012, between 25-30% of deals concluded were off-market to private buyers and vendors are confident of achieving high values without having to sell on the open market. The continuing shortage of farmland has also contributed to many buyers directly approaching potential sellers.
A two-tiered market has seen prices ranging from £6,000/acre up to £10,000/acre for better quality and better located land.
- Commercial arable and bare land, from parcels of 500 acres to fully equipped units of 1,000 acres or more, have been most in demand
- Farmers account for more than 60% of deals
- High numbers of investors, funds and traditional institutions looking for farmland
2013 outlook – main market influences
More vendors will opt to sell privately and supply will remain restricted on both open and private markets.
Farmland will become even more attractive as investors continue to view it as a safe haven with growth potential. Foreign investment is expected to strengthen in 2013 – growing Chinese interest is reported and German clients seek large blocks of good bare land in the eastern counties that can be easily contract farmed or let on FBT agreements.
2013 outlook – what will happen to prices?
We expect a continued rise, perhaps by 5-6%. The euro, changes in the tax regime or bad weather could affect the global economy as well as the land market.
How much land will come on the market in 2013?
We are expecting a shortage of supply. Those selling are likely to be retiring or relocating farmers or landowners, or investors who bought four or five years ago and want to release their profit.
Easiest farm to sell in 2013?
Buyers are generally looking for large commercial parcels of arable land or fully equipped units of 500 to 1,000-plus acres. For fully equipped units, buyers seek a farmhouse with a cottage or two rather than a larger property, so most of the value is in the land rather than the residential element. The eastern counties remain the most popular, as the larger more commercial units are located there.
Most difficult farm to sell in 2013?
Although lifestyle buyers may be returning, they have smaller budgets and are far fewer. An estate with a large country house and a series of cottages in an unpopular or inaccessible area will stay difficult to sell – the residential market is not as buoyant as the land market.