The seller’s market is set to continue for quality land but price differentials will widen, agents agree. While good commercial land and farms will continue to be in short supply, more livestock land could come on the market as a result of debt pressure.

“The range of values achieved continues to widen – with the size of the offering and demand from neighbours being major factors in the price achieved and the potential to cause differentials of thousands of pounds per acre,” said Anne Barker of Brown & Co.

The firm traded more than 6,000 acres in 2012, with average bare land values increasing by more than £500/acre, reflecting the general trend for productive capacity and earning potential to lead changes in price.

At Bidwells, James Brooke sees CAP reform taking a more prominent position. While the current round of reforms was unlikely to threaten subsidy payments significantly, support would fall in the long term.

“In the past where land has come available on a boundary, it has often been seen as a ‘must have’ opportunity. I am not so sure that this is the case now. Increasingly, site specific issues are influencing outcomes with land quality being an important factor,” he said.

The development of the two or three-tier market seen over recent years is going to become more pronounced, while income uncertainty could start to bring some smaller areas to the market, said Mr Brooke.

Smiths Gore’s statistical model estimates a rise of 7% for 2013, however this might be too strong, cautions the firm’s Giles Wordsworth. “But ultimately it is the market which will dictate and the market is crying out for more land,” he said. Local demand was key, making a difference of up to £2,000/acre.

“Poorer quality land is attracting fewer bidders and is being negatively affected by lack of finance for some buyers. We expect this to continue into 2013.

“Farmer buyers will also be less enthusiastic about units with significant residential value so we are more positive about the outlook for bare land compared with equipped.”

Lack of supply would continue to frustrate demand and put some pressure on prices. “Despite the recent poor harvest and battle with extraordinary weather conditions, we do not see any indicators for the supply increasing until 2014-15.”

Farmers represented 50% of buyers and 46% of sellers last year, according to Savills. The firm’s latest Agricultural Land Market Survey records expansion as their strongest motive.

Non-farming lifestyle buyers were at the lowest level since 1998 and significantly lower than the 42% peak in 2004.

After a lull of a few years, there was renewed interest from overseas buyers from within Europe and further afield, while about a quarter of the acreage traded through Savills in 2012 changed hands privately.

More sellers were moving out of farming for personal reasons, said the firm’s Alex Lawson, while the number relocating had fallen compared with 2011. The majority of purchases (70%) continue to be mainly cash-funded, with loans or debt accounting for 30%, largely unchanged since 2005.

Headline figures hide the variation in regional values, with arable land in the last three months of 2012 values ranging from £7,900/acre in the South East to £10,000/acre in the central region, said Matt Sudlow at Strutt & Parker.

Several farms in the South East with a strong residential element were initially marketed as a whole last year but saw the land sold separately, he said.

“Often there were good offers for the whole but even stronger offers for the land element only. Selling in lots is nothing new but the last time it was as strong as this was in the mid 2000s when the country house market was out-muscling the land market.”


Savills Agricultural Land Market Survey 2013

• Average prime arable land value across Great Britain rose by 10.7% to £7,594/acre in 2012

• 134,000 acres publicly marketed in GB in 2012, 14% less than in 2011

• Average value for all types of GB farmland rose 12.3% to £6,058/acre in 2012 (up 8.2% in 2011)

• England – average value of prime arable land up 10.8% to £7,609/acre (up 11% in 2011) – highest rate of growth in north of England

• Average prime arable land in Scotland rose in value by 9.9% in 2012 to £7,449/acre (up 12.8% in 2011)

• Acreage for sale in Scotland highest since 2008

• Wales – average prime arable land value rose by 10.2% in 2012 to £7,000/acre, with all land types rising by 9.6% to £5,309/acre.

• 6,460 acres advertised for sale in Wales during 2012 – lowest since 2004

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