English farmland values will remain static for the next three years before rising again in 2020, according to forecasts from one of the country’s biggest land agents.
Strutt & Parker has forecast that the price of land will only start to rise again in 2020 – at 5% annually.
In a more optimistic scenario, the price of land would rise by 3% for the next three years and then by 10% a year, while a conservative forecast suggests land values will fall by 7% until 2020, after which they will remain static for two years.
The forecasts are based on models of the market since 1997, produced by independent economic consultants Volterra, using data from Strutt & Parker’s database and economic data from the Bank of England and UK government.
“The models use trends and patterns in data on the price and volume of land marketed, as well as changes in economic variables that affect farmland prices, to forecast what might happen in the future,” said Jason Beedell, partner in the research team at Strutt & Parker.
“We then adjust the forecasts, with Volterra, based on our experience and expectations.”
The agent’s data also showed that one in four acres marketed in 2016 were left unsold, or had been withdrawn by December last year.
This was the highest proportion of unsold or withdrawn land since the agent’s records began in 1996 and was despite a 15% year-on-year fall in the number of acres on the market.
Sales are increasingly patchy and localised, say agents, and much more dependent on location.
Land agent Carter Jonas said hotspots had achieved 5% above the guide price last year.
Supply and prices
An increase in the supply of land for sale and low farmgate prices started to slow the rise in the price of land at the end of 2015, before values then started to fall.
Land prices in England and Wales fell by up to 10% in the 12 months to October 2016, according to leading agents.