Arable farmland leads an overall increase of 5%
By Louise Rose
AVERAGE farmland values in England and Wales have all increased by over 5% in the six months to Oct 1, with arable land showing a 10% increase.
And many complete farms and blocks of bare land have achieved in excess of £3000/acre, according to the property market report recently published by the Valuation Office.
Although land was mainly bought by existing farmers, non-farming purchasers have re-emerged attracted by the tax benefits of land ownership and rollover funds to invest, said the report.
And it said: "Land ineligible for IACS sold well with many farmers keen to purchase additional forage acres to retain their livestock premium and to sustain cattle unsold due to BSE."
Also most land has been sold by private treaty but with demand still outstripping supply, sales have often gone to best and final offers.
In East Anglia grade 2/3 land sold with vacant possession averaged £3000-3500/acre with £4000/acre achieved when competition was strong with an increased volume of land marketed reported during the summer.
Smaller parcels of bare land in the north were in demand from neighbouring owners and blocks of moderate bare arable land often sold for over £2500/acre, says the report, with little evidence that BSE had affected prices in the region.
Most sales have been by auction in the north-west with dairy farms averaging £4140/acre excluding quota, although there were no signs of price increases for marginal and high non-dairy land with BSE and the lower level of income attainable from the land given as possible reasons in the report.
Commercial arable units have been in strong demand from existing farmers who have sold dairy cattle and quota, and City purchasers in the West Country, with arable land values rising to around £3000/acre.
Also farm business tenancies have brought back the residential buyer who can let the land without being tied into a long-term tenancy agreement.
And most sales of let farms have been to the tenant who is often having to pay prices well in excess of previous levels with tenanted arable land sold in East Anglia during the six-month period averaging £1430/acre.