Buyers far outnumber sellers of single payment entitlements and prices have risen in early trading.
English flat-rate entitlements of €241 are currently worth around £205/ha, which is close to the value at which they can be expected to pay out in 2011, provided exchange rates remain similar to current levels. Entitlements of €302 are changing hands at £215/ha and €331 units at £225/ha.
“There is much more demand than we have seen before,” said George Paton of WebbPaton. “We have 2,400ha of demand on our books today with some buyers looking for 500- to 600-acre blocks of entitlements.”
The confiscation of entitlements under usage rules had reduced the number of “spare” entitlements and there were more buyers about, some of them finally getting round to buying entitlements for land which missed out on the original allocation in 2005, he said.
Mr Paton urged buyers and sellers to get their transactions under way in plenty of time. RLE1 entitlement transfer forms must be with the Rural Payments Agency by 3 April, which is a Sunday. This leaves the required six weeks until the 16 May SPS deadline for transfers to be processed by RPA, but if the deal hits a snag, this leaves no time to sort things out, he warned.
At Townsend Chartered Surveyors, Exeter, quota trader Adam Downing would also like far more entitlements to sell.
“We have a lot of people looking to buy large acreages of flat-rate entitlements, but we can’t get enough to sell. The trade is based on there being another three years of claim left, but a lot of buyers don’t want to pay more than they will get back in the first year.
“Flat-rate, area-only entitlements are currently trading at around £200 a hectare and I think the only way is up for these.”
Entitlements for Severely Disadvantaged Areas and Moorland are, as usual, in particularly short supply and are fetching up to twice their annual face value, said Mr Downing. Naked acres in England are attracting a rent of around £250/ha (£50/acre).
Trade has yet to begin in earnest in Scotland. Aberdeen and Northern Marts will hold its first auction today (14 January) and on Tuesday this week had 1850ha of entitlements booked for the sale.