Autumn flush of farms for strong market
Autumn is bringing a seasonal flush of farms to the market across a wide range of areas, with prices continuing to firm.
Farmland prices have increased by another 2% since the end of June, bringing the total price increase so far this year to 10%, according to Smiths Gore.
The area of farms and land currently on the market in England is comparable with 2010 figures, at a little more than 6,880ha (17,000 acres), says the firm.
“Many farmers are tempted to sell now because they believe prices are reaching their peak, but our model suggests value growth of 7% for 2012 and 2013. Demand continues to outstrip supply and we do not expect any change to this trend in the near future,” said head of farm agency Giles Wordsworth.
The volume of English, Welsh and Scottish farms and land advertised so far this year stands at 43,444ha (107,351 acres) against 50,875ha (125,712 acres) a year ago, according to Farmers Weekly‘s Land Tracker.
Smiths Gore’s figures show that equipped farm prices have risen by 2% since the end of June, while bare land has gone up by 1%, bringing growth over the year to 11% and 7% respectively.
The area of farmland for sale increased in most regions, but fell significantly in the East Midlands, where there was an unusually active market in 2010.
Despite the strong demand, farms still needed careful marketing, said Mr Wordsworth. Quite often the house could be too grand for a farm manager’s house, but not grand enough for a residential purchaser. Farmers looking to expand were the more discerning purchasers in terms of land quality, he said.
Investors from Hong Kong, China and India were increasingly interested in UK farmland as a safe home for their cash.
Sam Tydeman of the firm’s York office said that although land prices were firm, some potential farmer sellers were holding off the market to make another SFP claim.