Eastern land values in decline
BARE land values in East Anglia fell £185/acre in 2001, according to the latest Bidwells land price model.
The average price achieved this year, excluding the disposal of some exceptionally high value silt soils, was £2200/acre, compared with £2385/acre for 2000.
Agent Jim Bryant puts the surprisingly small decline down to the paucity of land coming up for sale. "In December 2000, I was not alone in thinking the financial pressures facing many agri-businesses would bring more land to the market, but in the eastern region nothing could have been further from the truth.
"This year, just over 22,000 acres have been offered as opposed to 41,300 acres last year. Foot-and-mouth certainly held back a considerable acreage, but the majority of land that was destined for sale has now seen open market exposure."
Mr Bryant says despite falling incomes – as illustrated by Deloitte & Touche figures which revealed farmers earn considerably less than the average national wage – virtually all the properties on offer sold. "Some sales proved more difficult than in previous years but demand was still firm."
Bidwells land price model predicts a further drop in East Anglian land values in 2002, with a continued slide until 2005 when land will be worth only £1759/acre.
Analyst Rob Cumine says the model is principally driven by farming returns, particularly wheat output. "The estimated land value for 2005 is based on feed wheat making £75/t, but many other factors could also have an effect."
Despite the forecast fall, Mr Bryant reckons demand for good, well located property will continue to outstrip supply. "A modest downturn is values is inevitable, but what we cannot take into account is the supply of product coming to the market – a big increase would definitely hit prices." *